Joint Choice of Tenure and Dwelling Type: A Multinomial Logit Analysis for the City of Chongju

Abstract

This paper explores the plausible variables that influence choices in the Chongju housing market. A joint model of tenure and dwelling type is estimated within the multinomial logit framework. The logit model of housing choice is fitted to the whole sample and to two sub-samples, which are categorised on the basis of neighbourhood quality. The empirical results do not exhibit a uniform pattern over the three sample cases. In the case of the whole sample, housing choice is influenced by the age, educational level and occupation of household head, a dummy of school-age children, and the ratio of housing price to household income. For the households locating in the high-quality neighbourhoods, the age, educational level and occupation of household head, and the housing price to income ratio appear significant. In the second sub-group, which comprises the households choosing a poor-quality neighbourhood, the age and occupation, a dummy of school-age children, and the housing price to income ratio appear to be the responsible variables. The findings suggest that the supply of housing should be diversified to meet the diverse segments of demand in the Chongju housing market. An increasing priority should be placed on the provision of rental housing, whether detached or multiple, rather than owner-occupied apartments.