capacity expansion contraction of a facility with demand augmentation dynamics we analyze the cost effective addition or removal of capacity from a facility governed by demand augmentation dynamics that is if the demand for goods or services exceeds the planned capacity of the facility during any period of a multiperiod planning horizon then additional capacity must be introduced within that period to meet the deficit the paper obtains an optimal management strategy that minimizes the sum of capital labor maintenance and underpro vision costs for n consecutive periods in the face of uncertain demands dynamic programming is used to demonstrate that under certain conditions on the cost functions an inventory like s s policy is optimal appropriately interpreted to define the removal as well as the augmentation of capacity the threshold levels s and s can be evaluated for each period without a costly search procedure in addition we show how to calculate various quantities of interest associated with the optimal policy

entry in greek manufacturing industry athens vs the rest of greece the paper reports an attempt to estimate the determinants of entry in greek manufacturing industry in the 1984 87 period and to identify the differences between locatio nal entry preferences entry in athens is found to be hesitant with respect to factors such as profitability and increased competition conversely entry in the rest of the country is strongly related to expected profits and safe markets negatively affected by relative labour costs and indifferent to international competition threats the healthier approach of regional entry is enhancing regional development prospects and partly justifies the strict regional policies of the 1980s

output dynamics in real business cycles models the time series literature reports two stylized facts about output dynamics in the united states gnp growth is positively autocorrelated and gnp appears to have an important trend reverting component this paper investigates whether current real business cycle rbc models are consistent with these stylized facts many rbc models have weak internal propagation mechanisms and must rely on external sources of dynamics to replicate both facts models that incorporate labor adjustment costs are partially successful they endogenously generate positive autocorrelation in output growth but they need implausibly large transitory shocks to match the trend reverting component in output

evaluating the economic impact of planning controls in the united kingdom some implications for housing this paper explores some implica tions for the housing market of the operation of the land use planning system in the united king dom drawing out the relevance of the methodol ogyfor other forms of land use regulation in con trast to the american zoning system the u k system ensures enough land is released to meet foreseeable housing needs by national allocation however the u k system is implemented and mediated locally in response to political and other pressures neo classical comparative stat ics combined with a more behavioral approach enables us to examine the interface between three related sub markets in a rapidly growing region jel r20

the introduction of price signals into land use planning decision making a proposal although directed to the british system of town and country planning this paper has relevance for many oecd countries including some with systems of land use regulation which evolved entirely independently of the british the paper starts by characterising the basic features of the british land use planning system viewed from the resource allocation point of view of an economist a conclusion is that the system explicitly excludes any use of price signals from its decisions the paper then summarises the problems which the exclusion of price information has given rise to because the uk planning system has deliberately constrained the supply of space and space is an attribute of housing which is income elastic in demand rising incomes not only drive rising real house prices but also mean that land prices have risen considerably faster than house prices several housing attributes other than garden space are to a degree substitutes for land but the underlying cause of the inelastic supply of housing in the uk is the constraint on land supply the final section proposes a mechanism which would make use of the information embodied in the price premiums of neighbouring parcels of land zoned for different uses such premiums signal the relative scarcity of land for different uses at each location and should become a material consideration in planning decision making if they were above some threshold this should provide a presumption of development unless maintaining the land in its current use could be shown to be in the public interest if combined with impact fees such a change would not only make housing supply more elastic and the system more transparent but would help to distance land availability decisions from the political process

joint management of capacity and inventory in make to stock production systems with multi class demand we evaluate the benefits of coordinating capacity and inventory decisions in a make to stock production environment we consider a firm that faces multi class demand and has additional capacity options that are temporary and randomly available we formulate the model as a markov decision process mdp and prove that a solution to the optimal joint control problem exists for several special cases we characterize the structure of the optimal policy for the general case however we show that the optimal policy is state dependent and in many instances non monotone and difficult to implement therefore we consider three pragmatic heuristic policies and assess their performance we show that the majority of the savings originate from the ability to dynamically adjust capacity and that a simple heuristic that can adjust production capacity based on workload fluctuation but uses a static production rationing policy can result in significant savings

the impact of land use planning and tax subsidies on the supply and price of housing in britain this article presents new empirical estimates of the impact of two types of policy intervention tax subsidies and land use planning on the housing market in britain the estimates are derived from a set of models representing the demand and supply sides of the market for the new private housebuilding which include an explicit land supply element the models are fitted to cross sectional data at the inter urban local authority level and then employed in medium period simulations of alternative policies modelling at this level enables estimates to be made of the extent of variation between local markets in the elasticity of supply and also in the impacts of policy measures including the capitalisation of tax subsidies

the impact of supply constraints on house prices in england we test the theoretical prediction that house prices respond more strongly to changes in local earnings in places with tight supply constraints using a unique panel dataset of 353 local planning authorities in england between 1974 and 2008 exploiting exogenous variation from a policy reform vote shares and historical density to identify the endogenous constraints measures we find that regulatory constraints have a substantive positive impact on the house price earnings elasticity the effect of constraints due to scarcity of developable land is largely confined to highly urbanised areas and uneven topography has a quantitatively less meaningful impact

ten propositions in uk housing macroeconomics an overview of the 1980s and early 1990s during the last ten years macroeconomists have increasingly come to realise that there are important interactions between housing and the wider economy in some cases this realisation has come too late to avoid the severe oscillations in the economy that have characterised the period since the mid 1980s this paper uses a macroeconometric model specifically designed to capture the interactions in order to reflect on the experience of the 1980s and early 1990s and to draw theoretical empirical and policy conclusions in terms of ten propositions

testing for the existence of office sub markets a comparison of evidence from two cities most conceptual and applied economic models of the structure of urban office markets have been developed from traditional location theory in their basic form these models tend to posit a trade of

housing markets consumption and financial liberalisation in the major economies abstract this paper analyses the implications of relaxing credit restrictions in housing finance markets a theoretical model of the interaction of financial and housing markets and forward looking agents is developed the effects of financial liberalisation in the model are analysed and evidence from the u s a and u k on the impact of easing credit restrictions is presented estimates are also made of the degree to which credit restrictions may bind on households in those countries where the range of mortgage products on offer is still more limited than in the u k and u s a simulations are undertaken to gauge the effect on consumption saving and bequests of wealth of possible future convergence in national systems of housing finance

housing price land supply and revenue from land sales in a recent study peng and wheaton empirically examine the effect of restrictive land supply on hong kong house prices however we argue that the impact of the supply of new land by the hong kong government is not as important as they maintain in accounting for the volatile house prices in hong kong we show that there is no causal relationship between land supply and housing prices our estimations based on the annual data of hong kong s public land sales find that the government acts to maximise land revenue maximisation of revenue from land sales is however consistent with the efficient allocation of resources we also show that the amount of land sales by the government and land in developers land banks tend to decrease when market interest rates increase land banking behaviour is governed by economic conditions long term land holding costs should cover interest costs

integrated capacity and inventory management with capacity acquisition lead times we model a make to stock production system that utilizes permanent and contingent capacity to meet non stationary stochastic demand where a constant lead time is associated with the acquisition of contingent capacity we determine the structure of the optimal solution concerning both the operational decisions of integrated inventory and flexible capacity management and the tactical decision of determining the optimal permanent capacity level furthermore we show that the inventory either before or after production the pipeline contingent capacity the contingent capacity to be ordered and the permanent capacity are economic substitutes we also show that the stochastic demand variable and the optimal contingent capacity acquisition decisions are economic complements finally we perform numerical experiments to evaluate the value of utilizing contingent capacity and to study the effects of capacity acquisition lead time providing useful managerial insights

agglomeration and competitiveness from marshall to chinitz chinitz like marshall is better known as a seminal theorist of the urban supply side than for his useful insights on continental economic regeneration this paper draws on both themes in chinitz s work assuming that the us trade deficit is a fiscal outcome the question remains as to why some us industries flourish while others fail the literature since 1988 emphasises the role of urban industrial clusters in nurturing globally competitive industries but route 128 s fall suggests limits to this view the alternative theme is that continentality 1 provides a menu of economic cultures and 2 generates feedback to demature declining older regions enter europe s 1992 more generally world development in the 1990s is seen as being led by three continental systems including east asia and operating via the dance of continents and regions now the primal economic constructs

rabbit hutches on postage stamps planning development and political economy the supply of land for housing has been restricted by planning controls the prices of land and of houses have risen in consequence as a result land has been used with increasing intensity with infill town cramming and smaller houses on less land rabbit hutches on postage stamps a destruction of the urban environment of the many to preserve a rural environment for a few why is the supply of land restricted firstly it is suggested because the british misapprehend the degree of urbanisation in their own country secondly because rural and farming interests ensure that the planning system operates in their favour and thirdly and most importantly because the planning process is tilted in favour of the existing residents of an area who seek to preserve their environment by resisting intruders a number of suggestions are made to resolve the situation by increasing the supply of land or reducing the demand for land

land conversion at the urban fringe a comparative study of japan britain and the netherlands in the 1980s the multiplier between land values for agricultural and urban uses was found to run at 50 200 times or even higher in the areas surrounding expanding cities in japan and britain co

land use planning and the housing market a comparative review of the uk and the usa this paper provides a review of some of the key articles and research examining the relationship between planning regulation and its impact on the housing market in the uk and the us in both count

controlling the housing land market some examples from europe summary one major problem for the production of low cost housing in the uk is the continued lack of control over the market for housing land yet there is very little debate about ways of controlling land prices this paper assesses some alternative approaches to land use planning by focusing on high growth sub regions in britain france and sweden it examines the flexibility of these planning systems to changes in the demand for housing land and the relationship between land release land prices and house prices the paper argues that the british approach is subject to a high level of uncertainty exacerbating risk taking speculative behaviour and price inflation under the french system development uncertainty is reduced and house prices more rigidly controlled with the result that speculative behaviour is constrained the swedish system is dependent on the ability of local authorities to build up land reserves which act as a buffer against price inflation however pressure on land prices in the open market has made this approach increasingly hard to sustain

sources of growth and the spectral properties of the labor market search model abstract this paper studies the dynamic properties of the labor market search model using three alternative sources of growth deterministic and stochastic exogenous growth specifications are compared with an endogenous growth specification which is based on an external learning by doing mechanism we apply watson s j political economy 101 6 1993 1011 test to assess the models performances over different frequency ranges it is shown that the endogenous growth specification can bring the labor market search model into closer conformity with the data than its exogenous counterparts

do council housing policies reduce migration between regions data from the 1973 general household survey of great britain are used to examine whether the council house system which currently provides a dwelling for one british family in every three tends to discourage long distance migration controls are introduced for various socioeconomic variables and the importance of occupation sector of employment age and education in explaining migration is discussed comparisons are also made between local movements and long distance migration the findings indicate that over longer distances council tenants have much lower migration rates than owner occupiers

housing market interventions and mobility an international comparison government interventions in housing markets usually have a strong side effect of lowering residential mobility interventions tend to raise the price of owner occupied dwellings and to lower rents compared with household incomes an index of these two tendencies is calculated for major conurbations of 16 countries among these switzerland south korea sri lanka and the former german democratic republic are of particular interest the rank order correlation of the index with residential mobility appears to be strong 0 962 and with an elasticity of 0 815 three quarters of the variance is explained no correlation was found with the home ownership rate in so far as lower mobility impairs housing welfare market interventions should be avoided but it is recognised that such interventions primarily reflect concern for equity and externalities

the welfare economics of land use planning abstract this paper presents an empirical methodology for the evaluation of the benefits and costs of land use planning the technique is applied in the context of the town and country planning system of the uk and examines the gross and net benefits of land use regulation and their distribution across income groups the results show that the welfare and distributional impacts can be large

planning and housing supply in two speed britain modelling local market outcomes summary economic research on uk housing markets has only recently got to grips with measuring and modelling the impact of planning and other public interventions although their importance has long been recognised in theory the interurban panel dataset utilised in this study does represent a step forward by permitting more robust econometric estimation and by incorporating a wider more balanced range of determinant factors a coherent set of relationships governing the key market outcomes house prices new building migration and vacancies can be established the modelling framework is used to explore differences in behavioural responses between markets in high and low demand states simulations are used to track the impact on market outcomes of different policy strategies applied in different types of locality supply measures needed to achieve national targets for house price growth reduction are assessed measures acting on both demand side and supply side variables in areas of high and low demand are compared these suggest that output is more sensitive than price to policies and that quite strong concerted policies would be needed to impact significantly on the major market imbalances currently seen

impacts of land development charges this paper analyzes the impacts of development charges on urban land development the way in which the burden of a development charge is shared between land supplier devel oper and land consumer as well as its impact on demand and on developer s profit depends on a complex range of factors including the elastici ties of land supply and demand the relationships between the development charge the developer s fixed costs and the raw land and developed land prices before charges are exacted the policy im plications of these findings are discussed jel r52

simultaneous capacity and production management of short life cycle produce to stock goods under stochastic demand this paper derives the optimal simultaneous capacity and production plan for a shortlife cycle produce to stock good under stochastic demand capacity can be reduced as well as added at exogenously set unit prices in both cases studied with and without carryover of unsold units a target interval policy is optimal there is a usually different target interval for each period such that capacity should be changed as little as possible to bring the level available into that interval our contribution in the case of no carry over is a detailed characterization of the target intervals assuming demands increase stochastically at the beginning of the life cycle and decrease thereafter in the case of carry over we establish the general result and show that capacity and inventory are economic substitutes the target intervals decrease in the initial stock level and the optimal unconstrained base stock level decreases in the capacity level in both cases optimal service rates are not necessarily constant over time a numerical example illustrates the results

real estate regulations in accra some macroeconomic consequences ghana has been one of the most rapidly growing economies in sub saharan africa this growth has been aided by ghana s improving policy environment in light of this the paper addresses the question of why given its higher level of per capita income and relatively strong growth the housing conditions of the poor in accra are considerably worse than those in a number of other african cities with lower incomes there are not many data available to answer this question so the method is indirect and takes two approaches first a variant of the monocentric city model is used to calculate accra s housing supply elasticity relative to those of other similarly sized african cities the model suggests that housing supply responsiveness is considerably lower in accra a result consistent with the observed higher housing costs secondly a number of traditional housing demand and reduced form equations are estimated for accra and the other cities this allows the formation of a quantitative judgment about accra

human capital formation and business cycle persistence abstract in this paper we examine the role of the formation of human capital in propagating shocks over the business cycle we show that a two sector equilibrium business cycle model with human capital is able to generate persistence in the growth of output and other aggregate variables comparable to that observed in the post war us data a key feature is the relatively low elasticity of substitution between skilled and unskilled labor in the production of human capital

long waves and uneven regional growth in recent years the phenomenon of uneven economic growth between different regions of the country has received increasing attention in the academic literature 16 17 20 27 the conventional explanation of uneven growth centers on disparities between regions in such things as unionization labor costs local taxes energy costs climate extent of local government regulation the availability of technology and access to markets the purpose of the present paper is to suggest that uneven regional development is a manifestation of regional long waves of economic growth and decline and that disparities between regions in such things as unionization labor costs and taxes are simply the result of different regions being at different phases of development in their respective long waves the essence of the view to be presented in the following pages is that regions experience long periods of sustained rapid economic growth followed by relatively lengthy periods of slow economic growth or economic decline the growth retardation stage of the long wave sets up the conditions for an eventual economic recovery and a return to a more rapid rate of growth the first section of the paper will be devoted to presenting the theoretical underpinnings of regional long waves supporting empirical evidence will be provided in the second section

can a real business cycle model pass the watson test abstract watson 1993 measures of fit for calibrated models journal of political economy 101 6 1011 1041 proposes a procedure for evaluating the fit of a dynamic equilibrium business cycle model under watson s criterion the standard real business cycle rbc model fails dramatically in reconciling the dynamics of the model with the data this inability to account for the dynamics of us aggregate data remains a major challenge to rbc theory this paper demonstrates that reasonable modifications can bring rbc theory into closer conformity with the data the empirical results indicate that when habit formation on leisure choice and employment externality are incorporated into the analysis the striking spectral density differentials documented by watson virtually vanish at business cycle frequencies

migration intentions in the u k which households want to migrate and which succeed the authors extend their earlier study of the impact of the council housing system on migration in the united kingdom in particular they examine the hypothesis that individuals differ in various unobserved ways and that personal characteristics that result in individuals becoming tenants may also discourage migration data are from the general household survey for 1973 and 1974 and pertain to both migration intentions and past migration the extent to which house tenure and other household characteristics affect the probability that a household embarking on a housing search will be successful in realizing its migration intentions is explored in addition the importance of both individual and aggregate local unemployment in determining migration intentions is discussed

a production inventory system with markovian capacity and outsourcing option we study the optimal production inventory outsourcing policy for a firm with markovian in house production capacity that faces independent stochastic demand and has the option to outsource we find very simple optimal policy forms under fairly reasonable assumptions in addition when the capacity markov process is stochastically monotone the policy parameters decrease in the firm s current capacity level under additional assumptions all these results extend to the infinite horizon and undiscounted cost cases we analyze comparative statics and the necessity of some technical conditions and discuss when the outsourcing option is more valuable

local housing supply and the impact of history and geography this paper considers the impact of existing land use patterns on housing supply price elasticities in local areas of england under existing planning policies the paper demonstrates that despite

british planning policy and access to housing some empirical estimates there is evidence that the implementation of the planning system creates scarcity rents for land in different uses by acting as a constraint on land supply this paper provides for 1984 estimat

business cycles and labor market search the quantitative implications of labor market search for economic fluctuations are evaluated in the context of a real business cycle model incorporating labor market search into the model is found to improve its empirical performance along several dimensions in particular hours now fluctuate substantially more than wages and the contemporaneous correlation between hours and productivity falls in addition the model replicates the observation that output growth displays positive autocorrelation at short horizons overall the empirical results suggest that the labor market search environment embodies a quantitatively important propagation mechanism copyright 1996 by american economic association

trade off between capacity invested and inventory needed a multi item capacitated make to order production system with considerable demand fluctuations is discussed the relationship between the available capacity and the inventory needed to meet customer requirements with a pre defined service level is modeled furthermore the total cost for both capacity and inventory is minimized and it is shown that assuming negligible change over times the double of the surplus inventory cost has to be equal to the excess capacity cost to ensure minimum total cost

theory and estimation in the economics of housing demand the main purpose of this paper is to review recent theoretical and empirical developments in the economics of housing demand in particular we ask what is known concerning the permanent income elasticity of housing demand vis a vis the current or measured income elasticity what is known concerning price elasticities what is the appropriate functional form for housing demand equations what is the role of demographic variables what is known concerning dynamic aspects of housing demand what appear to be the major sources of bias in existing estimates of demand equations

the determination of the price of land received theories of the land market are inadequate since they ignore the supply of land it is known that occupiers of land are usually unwilling to sell at the market price but require compensation for being forced to move incorporating this as a theory of supply into land market theory allows us to explain or predict that a urban sprawl will occur in the absence of planning controls b a development gains tax will slow down the rate of development of land and increase its price c whether land is owner occupied or occupied by tenants will affect its development and d powers of compulsory purchase may be necessary for certain kinds of development but may cause social costs

region specific estimates of the determinants of real estate investment in china this paper utilises a reduced form equilibrium model to investigate the possible sources of real estate investment differentials among 22 provinces five autonomous regions and four municipalities of the people s republic of china the model is estimated using panel data from 2001 to 2006 yielding a total of 186 observations specifically empirical results suggest that demographic economic and planning factors are the major determinants to cause real estate investment to vary among chinese regions the relatively small coefficient estimate of real interest rates indicates that it has a significant but modest impact based on the coefficient estimates this paper finally suggests that the chinese government should focus and work on several policy parameters in order to achieve a more balanced state of real estate investment across chinese regions

planning policy and retail property investment in the uk empirical evidence suggests that planning policies significantly impact on investment property market performance in the uk it is less clear however how information about the planning policy environment feeds into investment decision making this paper seeks to explore this issue it reports on interviews with the property investment community and focuses on the decision to invest in the retail sector the paper uses a six stage model of the investment decision making process as a framework for analysing the way in which concerns about policy impact on behaviour the results suggest that an understanding of the policy environment and the development of a relationship with local planning authorities are most important in the post acquisition asset management stage of the investment process the research also reveals variations in access to policy intelligence and that approaches to analysis of the likely effects of planning regimes vary with fund type and strategy

spatial housing economics a survey this introduction to the virtual special issue surveys the development of spatial housing economics from its roots in neoclassical theory through more recent developments in social interactions modelling and touching on the role of institutions path dependence and economic history the survey also points to some of the more promising future directions for the subject that are beginning to appear in the literature the survey covers elements of hedonic models spatial econometrics neighbourhood models housing market areas housing supply models of segregation migration housing tenure subnational house price modelling including the so called ripple effect and agent based models possible future directions are set in the context of a selection of recent papers that have appeared in urban studies nevertheless there are still important gaps in the literature that merit further attention arising at least partly from emerging policy problems these include more research on housing and biodiversity

real and nominal interest rates and the demand for housing abstract this paper is an empirical study of the relationship between inflation expectations and the demand for housing the major findings are that housing demand is a function of both expected inflation and the real interest rate but that demand cannot be specified as a function of the nominal rate it is also shown that expected inflation has a larger impact on those households that are likely to be constrained by capital market imperfections

the impact of planning on local business rents despite the pervasiveness of planning intervention in the land and property market the economic effects of the planning system have been little researched while there is a growing body of work addressing this issue in the housing sector similar work considering the business sector is marked only by its absence the paper describes the first substantive attempt to explore this subject area through an analysis of the impact of planning on business rents a full structural model of a local property market was developed it incorporates the planning regime as a key element of the system and it allows for the interaction between property market use sectors the model formed the basis for the creation of a simplified five equation system that could be operationalised within extant data constraints upon application a local effect of planning was identified that was consistent with theory as planning regimes become tighter the local supply of space decreases this has a negative effect on local economic ac

construction elasticities and land availability a two stage least squares model of housing supply using the variable elasticity approach this paper uses data at english local authority district level to construct a simultaneous equation model of housing construction that compares elasticities of supply between two cross sectional periods 1988 boom and 1992 slump using the variable elasticity approach econometric issues raised by earlier supply studies are discussed and tested for the paper also discusses the rationale for and tests the existence of a backward bending supply relationship and finds that supply is concave in both periods and bends backwards during the boom evidence of a structural break between boom and bust is found producing average price elasticities of supply noticeably smaller in the boom 0 58 than in the slump 1 03 with considerable variation across disticts land supply elasticities are found to be more stable over time and marginally greater in the boom 0 75 than in the slump 0 71 the paper also calculates second partial derivatives based on the whole demand supply system to obtain estimates

the qualitative economics of development control abstract this paper examines space supply restrictions and containment policies in the context of a monocentric urban model with several classes results are obtained concerning the qualitative effects of such policies on space i e land values and locations of the various groups

technical progress and aggregate fluctuations abstract we compare the cyclical fluctuations exhibited by a stochastic growth model under various stochastic processes governing technical change all of which are highly autocorrelated the results obtained are quite sensitive to the precise form of this stochastic process in particular the results depend on whether growth is deterministic or stochastic and in each case are quite sensitive to the persistence of an innovation the model does a relatively poor job of accounting for features of observed business cycles when technical change is difference stationary and does a better job when technical change is trend stationary but highly autocorrelated

on the price of land and the value of amenities a house represents not only a bundle of structural characteristics but also a set of location specific characteristics adding locational coordinates and site area to other house characteristics makes it possible to estimate a land rent surface as well as thle hedonic prices attached to local patterns of land use and other neighbourhood characteristics one can then estimate how the value of such location specific characteristics are capitalized into land prices this analysis illustrated with estimates based on data from two british towns has a number of wider implications it generates a more parsimonious method of estimating amenity values it also reveals likely systematic biases produced by conventional hedonic studies which exclude land and location finally it clarifies the conceptual definition of land and suggests that monocentric models can perform well despite recent criticism

modelling sustainable home ownership demographics or economics according to recent official projections 4 4 million new households will be formed in england between 1991 and 2016 these estimates are based on a detailed analysis of demographic trends but take no account of the effect of potential changes in economic conditions particularly on the owner occupancy rate in this paper we propose a new approach to modelling sustainable owner occupancy which places less emphasis on demographics but considers in more detail the role of market mechanisms through changes in house prices and rates of new construction