ABSTRACT
This chapter reviews a number of major findings concerning the demand for housing which have emerged from a major ongoing World Bank study. In fact most estimated income elasticities cluster within a range of 0.4 to 0.6, indicating that housing expenditures increase only 40 to 60 percent as far as income. Within cities the fraction of income that households are willing to spend for housing typically declines as income increases, but as the general level of economic development increases, the average fraction of income allocated to housing increases. Less than a decade ago, there were only a handful of published analyses of housing demand in developing countries, and fewer yet that tried to compare observed patterns of behavior across countries. The chapter shows some of the major implications for housing project design and for national housing policies.
