Introduction : Why do we live where we live? Is it a coincident, family tradition or a deliberate choice? Perhaps the choice is not entirely free, but rather affected by forces such as working opportunities and the possibility to attract household resources.The free choice is hence restricted by economic funds.Many times we just cannot afford to reside in the most favourable location.The fact that the price level of detached houses demonstrates large differences depending on which locality or region you are situated in, is not new information.It is also known that charges, tax and income levels varies between different municipalities and locations.As if these economic differences would not be enough, the costs regarding other types of consumption goods also varies, e.g. insurance premiums, food and local transportation costs.
Abstract
The purpose of the thesis was to study price differentials of housing in and outside of Swedish cities. When doing so, the average price of detached houses in every Swedish municipality and city was taken. The prices were based on the purchasing sum (köpeskillinen) while the investigated time period was 1995 and 2005. To separate between the different areas in Sweden, the country itself was divided into two separate regions; south, and north. South was used twice, once with the three major city areas (Stockholm, Göteborg and Malmö/Lund) included and once when they were not. Within each region two groups of locations could be differentiated; economic centres (Stockholm as an example) and sub-municipalities (Danderyd as an example). Economic centers represented “in cities” and sub-municipalities “outside of cities”. In addition to the main purpose, we also wanted to examine what variables that are affecting the price of housing. Therefore; according to our theoretical background, income, working opportunities and availability of teachers were the important factors.The empirical analysis signified that there is a clear average price differential between economic centers and sub-municipalities in all three regions. Detached houses in economic centers have become more expensive relative to sub-municipalities. The largest difference can be observed in the three major city areas, where the most extreme price changes have occurred. Consequently, it can be said that working opportunities had the foremost effect on house prices in the majority of our research areas. It was also found that income had a significant influence at several locations. Teachers per 100 students had on the other hand little or no effect at all on house prices. Moreover, where it was significant it affected houses prices negatively.
Contents
1 Introduction
1.1 Purpose
1.2Limitations
1.3Outline
2 Theoretical Background
2.1Regions
2.1.1 Definition and Economic Impact of Regions
2.1.2 Central Place Theory
2.2 Location Theory for Households
2.2.1 The Determination of the Price of Land
2.2.2 Demand and Supply for Housing
2.2.3 Optimal Household Location
2.3 Urban Land Use Models
2.3.1 Von Thünen Model
2.3.2 Monocentric City Model
2.4Cities and its Dynamics
2.4.1 Definitions and Economic Impacts of Cities
2.4.2 Proximity
2.4.3 Suburbs
3 Empirical Analysis
3.1 Regional Division of Sweden
3.2The Model
3.2.1Regression Equations
3.3Regressions Analysis
3.4 Graphical Analysis
3.4.1Three Major City Areas
3.4.2 Southern Part of Sweden
3.4.3Northern Part of Sweden
3.5Summary of Analysis
4 Conclusion
References
Appendix
Author: Pete, Kristof,Kantola, Jan
Source: Jonkoping University
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