DEMAND FOR HOUSING IN THE BOMBAY METROPOLITAN REGION

We estimate the demand function of housing for Bombay Metropolitan Reg ion in a two-step econometric analysis. The first step estimates the h edonic price index for different regions in Bombay, and in the second step the demand for housing is estimated as a function of economic and household characteristics. The results indicate that housing demand i s inelastic with respect to income and price. The income elasticities for owners and tenants are around 0.33 and 0.38, respectively, while t he price elasticities are -0.21 and -0.75, respectively, for owners an d tenants. We also estimate income and price elasticities for differen t income classes. The paper concludes with policy prescriptions. (C) S ociety for Policy Modeling, 1997.