Ma, L; Reed, R and Jin, X (2018) Identify the equilibrium of residential construction output: A vector error correction model approach. Engineering, Construction and Architectural Management, 25(1), pp. 21-38. ISSN 0969-9988
Abstract
Purpose Due to the complicated nature of houses, the driving factors of the residential construction output can be investigated from different perspectives of interests. However, little research has provided an insight of the trend of the residential construction output from a cross-disciplinary perspective. The purpose of this paper is to identify the long-run equilibrium types of residential construction output, including external equilibrium, solo-market equilibrium and dual-market equilibrium. Design/methodology/approach A vector error correction model is applied into longitudinal data in the eight Australian states and territories to overview the regional variations of the residential construction output. Findings The empirical results show that the equilibrium of regional residential construction outputs in New South Wales and Victoria are determined by the external factors; the equilibrium in Western Australia is dominated by the construction market; and the equilibriums in the other five states and territories are influenced by both construction and house markets. Research limitations/implications The simplified approach may overlook the detailed explanation of the external factors, such as regional population, economy, policy and so forth. Given this limitation, future studies can introduce the correspondingly variables as per research interests. Originality/value Implementing the existing research into residential construction output and house supply, this research provides a simplified approach that demonstrates the linkage between construction and real estate sectors to identify the long-run equilibriums across regions. The underlying research sheds light in delivering inter-disciplinary research into the residential construction output.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Australia; residential property; prices; vector error correction model; long-run equilibrium; output |
| Index terms: | vector error correction model, real estate, residential construction, markets, future study, construction market, linkage, residential property, Victoria, Australia, population, methodology, variation, New South Wales, long-run equilibrium |
| Subjects: | demography, market analysis, contractual condition, Geography, construction integration, research methods, economic analysis, regions and continents, real estate economics, construction type, business, research design and methodology |
| Topics: | Contract Administration, Urban Studies, Construction Technology, Business Strategy, Research Practice, Geographical Context |
| Descriptive scope: | 4 PCTA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here