A supply-determined model of housing investment is estimated from quarterly data over the 1963-83 period. The model is built on dynamic marginal cost pricing considerations and allows short- and long-run supply elasticities to differ. These are estimated as 1.0 and 3.0, respectively, but most of...

A commonly used procedure in a wide class of empirical applications is to impute unobserved regressors, such as expectations, from an auxiliary econometric model. This two-step (T-S) procedure fails to account for the fact that imputed regressors are measured with sampling error, so hypothesis...