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Doesn't assuming that demand is exogenous ensure that their model will return the result that they want? It seems that how exogenous demand is is the central qu
by llimllib 9y ago
Doesn't assuming that demand is exogenous ensure that their model will return the result that they want? It seems that how exogenous demand is is the central question in the housing debate; if SF is so desirable that building more luxury apartments just brings in new rich people, then this model is useless.
(I think, and hope, that it's not. But I think the author danced around the central question by building this model.)
- akanet 9y agoI think Sonja's study does more than "prove a point" - it also illustrates exactly _how_ "luxury" housing helps everyone, which is a huge sore point in local politics. Understanding of the nature of how flexible preferences and different levels of wealth interact is still a useful exercise. It would be very difficult to devise a study to prove whether exogenous demand is real, but a casual examination of San Francisco suggests that it is not - SF has built very little housing and still consistently out-attracts many other metro areas.
- InternetGerbil 9y agoYes, exogenous demand is the central question in the housing debate. That's one of the uses of a model, to think about one aspect of a process at a time.