Household Attributes and the Demand for Private Rental Housing

In traditional demand analysis the quantity of a commodity demanded is usually expressed only as a function of household income and prices. In other respects household preferences are assumed to be identical. Yet in the housing market we expect households with different characteristics to demand different types and quality of accommodation. We therefore develop a model to test the hypothesis that household characteristics other than income, such as size, occupation and education, affect housing demand in a well-specified manner.' To do this we first discuss a model that includes these characteristics and then estimate it, using data from a sample of households and their dwellings taken from the private rental sector in central London.