This paper offers a theoretical discussion of the price elasticity of supply. While there have been a number of attempts to estimate the responsiveness of UK supply, relatively little has been written on what determines it. A key omission is the effect of long-term real interest rates. Steep...

THE EMPIRICAL MODEL An empirical analysis applied the algebraic econometric model using RICS regional monthly data on unsold houses and rate of sales in the last three months to calculate the implied time on the market T2. Quarterly regional price data was taken from the Nationwide. The...