Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/120046 
Year of Publication: 
2011
Series/Report no.: 
51st Congress of the European Regional Science Association: "New Challenges for European Regions and Urban Areas in a Globalised World", 30 August - 3 September 2011, Barcelona, Spain
Publisher: 
European Regional Science Association (ERSA), Louvain-la-Neuve
Abstract: 
The objective of this paper is to explain the mechanisms that have lead to the remarkable improvement of the East German Housing Market during transition after the political change in 1989 and the reunification of Germany in 1990. Theoretical analysis suggests, that housing policy of the former GDR did not maximize consumer`s utility. Socialistic housing and construction policy limited the welfare with and distorted construction costs and rent control. The reason for that was not alone a lack of quantity but also a lack of quality and diversity. Therefore we argue that diversification of quality and te-nure in the post communist era enhanced the welfare of consumers. We propose that welfare on the East German Housing market was significantly increased by creating a new variety of housing types and qualities which fits better with different preferences of the households. A filtering model predicts theoretically the observable trends of seg-mentation and the development of a higher diversity of housing market segments. But additionally to the transition a bunch of subsidies were set up during transition. There-fore the paper is focused on the interdependency between housing market subsidies, the supply cost function, the qualitative development of the housing stock and the choice of demand. Empirically we observe the change and qualitative improvement of housing conditions in East Germany during transition and quantitative effects like increased vacancy risk in a shifted hierarchy of housing qualities.
Document Type: 
Conference Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.