Choice of Rental Housing in Korean Market: Alternative Approach

Abstract

This study proposes an alternative Korean rental housing choice model, in which households choose their dwelling units using hierarchical logit analysis. The decision is viewed as a partial sequence process, beginning with the choice of rental housing tenure and finishing with a decision on the type of rental housing occupation. The study incorporates hedonic price technique into a hierarchical logit model in order to examine an additional step in the urban spatial structure. In addition, it examines separate effects of permanent and transitory components of measured income through the instrumental variable method based on human capital theory. For comparative purposes, a multinomial logit analysis is proposed.