DEMAND FOR RENTAL HOUSING IN KOREA WITH SOME ESTIMATION ISSUES

The purpose of this study is to estimate the determinants of rental-ho using demand for three types of cities in Korea. The study focuses on the statistical estimation issues encountered in calibrating rental-ho using demand: selectivity bias, estimation of hedonic prices, applicat ion of the permanent income hypothesis, and functional forms of rental housing demand. The procedure for the estimation of the demand functi on consists of a logit and ordinary least square to address the first three issues. These estimated values are then used as explanatory vari ables for the final housing-demand function in a two-step procedure. I t is shown that these procedures are both practical and suitable for a n analysis of the Korean rental housing market.