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Journal ArticleDOI

The concept of housing affordability: Six contemporary uses of the housing expenditure‐to‐income ratio

01 Oct 1995-Housing Studies (Taylor & Francis Group)-Vol. 10, Iss: 4, pp 471-491
TL;DR: This paper identified six distinct ways in which the housing expenditure-to-income ratio is being used as an assumed measure of affordability: description of household expenditures; analysis of trends; administration of public housing by defining eligibility criteria and subsidy levels; definition of housing need for public policy purposes; prediction of the ability of a household to pay the rent or the mortgage; and as part of the selection criteria in the decision to rent or provide a mortgage.
Abstract: In recent years ‘housing affordability’ has become a commonly used term for summarising the nature of the housing difficulty in many nations. But what is the ‘housing affordability’ problem? This paper questions ‘affordability’ as a concept for analysing housing problems and as a definition of housing need. With a focus on the North American usage, this paper identifies six distinct ways in which the housing expenditure‐to‐income ratio is being used as an assumed measure of affordability: (1) description of household expenditures; (2) analysis of trends; (3) administration of public housing by defining eligibility criteria and subsidy levels; (4) definition of housing need for public policy purposes; (5) prediction of the ability of a household to pay the rent or the mortgage; and (6) as part of the selection criteria in the decision to rent or provide a mortgage. Each of the six uses is assessed based on the extent to which it is a valid and reliable measure of what it purports to measure.
Citations
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Journal ArticleDOI
TL;DR: In this article, the authors discuss the potential implications of the residual income paradigm for the analysis of housing problems and needs, for housing subsidy policy, and for mortgage underwriting practice.
Abstract: This article seeks to increase the awareness of and support for the residual income approach to housing affordability indicators and standards, especially in the United States. It begins with an overview of various semantic, substantive, and definitional issues relating to the notion of affordability, leading to an argument supporting the conceptual soundness of the residual income approach. The concept is then briefly set into the historical context of U.S. and British debates on affordability measures. This description is followed by a discussion of two of the principal issues involved in crafting an operational residual income standard: the selection of a normative standard for nonhousing items and the treatment of taxes. The article concludes by considering some of the potential implications of the residual income paradigm for the analysis of housing problems and needs, for housing subsidy policy, and for mortgage underwriting practice.

432 citations

Journal ArticleDOI
TL;DR: In this paper, the authors present an empirical application and comparison of six different multiple criteria decision-making (MCDM) approaches for the purpose of assessing sustainable housing affordability, and evaluate the applicability of different MCDM methods for the focused decision problem.
Abstract: While affordability is traditionally assessed in economic terms, this paper tests a new assessment method that draws closer links with sustainability by considering economic, social and environmental criteria that impact on a household’s quality of life. The paper presents an empirical application and comparison of six different multiple criteria decision making (MCDM) approaches for the purpose of assessing sustainable housing affordability. The comparative performance of the weighted product model (WPM), the weighted sum model (WSM), the revised AHP, TOPSIS and COPRAS, is investigated. The purpose of the comparative analysis is to determine how different MCDM methods compare when used for a sustainable housing affordability assessment model. 20 Evaluative criteria and 10 alternative are as in Liverpool, England, were considered. The applicability of different MCDM methods for the focused decision problem was investigated. The paper discusses the similarities in MCDM methods, evaluates their robustness and contrasts the resulting rankings.

350 citations


Cites background from "The concept of housing affordabilit..."

  • ...Housing affordability Housingaffordability has received considerable attention across the globe for a number of years [13-20]....

    [...]

Journal ArticleDOI
TL;DR: For much of the past century, economic theory has bypassed the equality issue so thoroughly that Joan Robinson has compared the lack of a convincing theory of income distribution to the situation in the early 1930S when the discipline had no theoretical apparatus to deal with unemployment.
Abstract: For much of the past century the mainstream of economic theory has concentrated on efficiency questions, carefully avoiding judgments on the distribution of economic rewards in society. A measure of the modern neglect of the subject is the fact that of the more than 1500 articles published in the American Economic Review and the Economic journal over the last ten years only some ioo dealt with distributional questions of any kind. Indeed, economic theory has bypassed the equality issue so thoroughly that Joan Robinson has compared the lack of a convincing theory of income distribution to the situation in the early 1930S when the discipline had no theoretical apparatus to deal with unemployment. In her address to the American Economic Association in 1972 she described \"the evident bankruptcy of economic theory which for the second time has nothing to say on the question, that to everyone except economists, appears most in need of an answer.\" However, the mid-9g7os has seen a welcome upsurge of interest in distributional issues. Amartya Sen, Hollis Chenery, A. B. Atkinson, and now Arthur M. Okun and Lester C. Thurow have all produced important theoretical works on the subject. In the early nineteenth century Ricardo defined the laws which regulate income distribution as the principle problem in political economy, not only because of the significance of distributional shares per se but because the theory of income distribution held the key to an understanding of the productive system. It is heartening to see the discipline turning its attention once again to this all important question. Thurow presents a clear picture of the actual distribution of income and wealth in the United States economy and then moves on to evolve a conceptual framework that will square with the observed facts. His demolition of neoclassical marginal productivity theory is neat, elegant, and devastating. The only question mark is how anyone ever believed in such tautological nonsense. Thurow's own theory of income distribution revolves around the notion that in advanced market economies people compete over jobs rather than over wages and that income differentials have something to do with education and training but much more to do with economic

332 citations

Journal ArticleDOI
TL;DR: In this paper, the COPRAS method of multi-criteria decision making (MCDM) is applied to three residential areas as an example of how sustainable housing affordability can be assessed using a MCDM method.
Abstract: Housing affordability is a complex issue that must not only be assessed in terms economic viability. In order to increase quality of life and community sustainability the environmental and social sustainability of housing must also be taken into consideration. The paper considers the application of a methodology that can be applied to assess the affordability of different housing locations in a sustainable manner, taking into account a range of economic, environmental and social criteria. The COPRAS method of multi-criteria decision making (MCDM) is selected and applied to three residential areas as an example of how sustainable housing affordability can be assessed using a MCDM method. The outcome of the study reveals that considering a range of social and environmental criteria can greatly affect the calculation of an areas affordability, in comparison to focusing solely on financial attributes. COPRAS was found to be an effective method for the assessment and could be applied in other regions or internationally.

262 citations


Cites background or result from "The concept of housing affordabilit..."

  • ...This is primarily due to its arbitrary and normative nature [7,13,14,16] and inability to account for issues such as housing quality [15]....

    [...]

  • ...However, the housing expenditure to income ratio has been subject to criticism by several authors [7,13,14,15]....

    [...]

References
More filters
Book
31 Dec 1969
TL;DR: This chapter discusses the construction of Inquiry, the science of inquiry, and the role of data in the design of research.
Abstract: Part I: AN INTRODUCTION TO INQUIRY. 1. Human Inquiry and Science. 2. Paradigms, Theory, and Social Research. 3. The Ethics and Politics of Social Research. Part II: THE STRUCTURING OF INQUIRY: QUANTITATIVE AND QUALITATIVE. 4. Research Design. 5. Conceptualization, Operationalization, and Measurement. 6. Indexes, Scales, and Typologies. 7. The Logic of Sampling. Part III: MODES OF OPERATION: QUANTITATIVE AND QUALITATIVE. 8. Experiments. 9. Survey Research. 10. Qualitative Field Research. 11. Unobtrusive Research. 12. Evaluation Research. Part IV: ANALYSIS OF DATA: QUANTITATIVE AND QUALITATIVE. 13. Qualitative Data Analysis. 14. Quantitative Data Analysis. 15. The Logic of Multivariate Analysis. 16. Statistical Analyses. 17. Reading and Writing Social Research. APPENDICES. A. Using the Library. B. GSS Household Enumeration Questionnaire. C. Random Numbers. D. Distribution of Chi Square. E. Normal Curve Areas. F. Estimated Sampling Error. Preface. Acknowledgments.

14,990 citations

Book
01 Nov 1979
TL;DR: The paper shows how reliability is assessed by the retest method, alternative-forms procedure, split-halves approach, and internal consistency method.
Abstract: Explains how social scientists can evaluate the reliability and validity of empirical measurements, discussing the three basic types of validity: criterion related, content, and construct. In addition, the paper shows how reliability is assessed by the retest method, alternative-forms procedure, split-halves approach, and internal consistency method.

7,135 citations


"The concept of housing affordabilit..." refers methods in this paper

  • ...Validity and reliability are tests of the trustworthiness of the measurement instruments used in research (see for example: Babbie, 1992; Blalock, 1979; Carmines & Zeller, 1979)....

    [...]

Journal ArticleDOI
TL;DR: In this paper, the authors examined economic discrimination in labor markets using a stochastic model and empirically plausibility and implications of the alternative models of economic discrimination; role of statistical theories in the explanation of labor market discrimination.
Abstract: Examines economic discrimination in labor markets using a stochastic model. Analysis of several types of economic discrimination within the context of competitive market assumptions; Empirical plausibility and implications of the alternative models of economic discrimination; Role of statistical theories in the explanation of labor market discrimination. (Abstract copyright EBSCO.)

1,379 citations


"The concept of housing affordabilit..." refers background in this paper

  • ...In addition, it applies a statistical average of a group of households to an individual household, leading to the problem of statistical discrimination (Aigner & Cain, 1977; Galster, 1992; Hulchanski, 1994a; Sunstein, 1991; Thurow, 1975)....

    [...]

Book
15 Dec 1975
TL;DR: For much of the past century, economic theory has bypassed the equality issue so thoroughly that Joan Robinson has compared the lack of a convincing theory of income distribution to the situation in the early 1930S when the discipline had no theoretical apparatus to deal with unemployment.
Abstract: For much of the past century the mainstream of economic theory has concentrated on efficiency questions, carefully avoiding judgments on the distribution of economic rewards in society. A measure of the modern neglect of the subject is the fact that of the more than 1500 articles published in the American Economic Review and the Economic journal over the last ten years only some ioo dealt with distributional questions of any kind. Indeed, economic theory has bypassed the equality issue so thoroughly that Joan Robinson has compared the lack of a convincing theory of income distribution to the situation in the early 1930S when the discipline had no theoretical apparatus to deal with unemployment. In her address to the American Economic Association in 1972 she described "the evident bankruptcy of economic theory which for the second time has nothing to say on the question, that to everyone except economists, appears most in need of an answer." However, the mid-9g7os has seen a welcome upsurge of interest in distributional issues. Amartya Sen, Hollis Chenery, A. B. Atkinson, and now Arthur M. Okun and Lester C. Thurow have all produced important theoretical works on the subject. In the early nineteenth century Ricardo defined the laws which regulate income distribution as the principle problem in political economy, not only because of the significance of distributional shares per se but because the theory of income distribution held the key to an understanding of the productive system. It is heartening to see the discipline turning its attention once again to this all important question. Thurow presents a clear picture of the actual distribution of income and wealth in the United States economy and then moves on to evolve a conceptual framework that will square with the observed facts. His demolition of neoclassical marginal productivity theory is neat, elegant, and devastating. The only question mark is how anyone ever believed in such tautological nonsense. Thurow's own theory of income distribution revolves around the notion that in advanced market economies people compete over jobs rather than over wages and that income differentials have something to do with education and training but much more to do with economic

464 citations


"The concept of housing affordabilit..." refers background in this paper

  • ...In addition, it applies a statistical average of a group of households to an individual household, leading to the problem of statistical discrimination (Aigner & Cain, 1977; Galster, 1992; Hulchanski, 1994a; Sunstein, 1991; Thurow, 1975)....

    [...]