Abstract: This article examines the responsiveness of new housing supply to prices and costs, using the case of Ireland at quarterly frequency from the 1970s, as well as a county-level panel from the 1990s. Across four error-correction specifications, and supported by an instrumental variables approach, we find the estimated elasticity of new housing supply to prices of +0.9 in the baseline, while that of costs is larger in magnitude (−1.9). We present evidence that responsiveness to prices rose after the 1980s, then fell in the 2000s, before rising again and also that elasticities vary at the county level
Keywords: housing supply elasticity, Ireland, error correction
Cite this article:
Günnewig-Mönert, M., & Lyons, R. C. (2024). Housing prices, costs, and policy: The housing supply equation in Ireland since 1970. Real Estate Economics, 52, 1075–1102. https://doi.org/10.1111/1540-6229.12491