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Volume :13 Issue : 3 2006
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Demand for Housing in Kuwait: A Cointegration Analysis
Auther : Mahdi Hamza Al-Salman
Government- spending program on housing in Kuwait is the largest part of the subsidies program provided by the government. This paper uses cointegration analysis to study the demand for housing behavior in the Kuwaiti market. The aim of the paper is to estimate the demand for housing function and to determine the variables that are most useful in explaining the short- and the long- run behavior of the demand. The results of the study indicate that there exists a long- run relationship between demand for housing and the main variables that determine this demand in Kuwait. These include income (GDP), population growth and stock of houses. It was also seen that there are significant differences between the elasticities of demand with respect to different variables especially for income and price variables.