The 1995/1996 Household Income, Expenditure - (PDF, 101 mb ...

Rent Elasticities
VI.18
1990/1991 Obs Elasticity Std Error R-square F Value
Ordinary Rent 2557 .64 .026 .1912 604.381
Furnished Rent 417 .33 .074 .0478 20.862
Both rents were normal goods, and empirically "necessities" but ordinary
rent was fairly elastic. Neither case provides justification for subsidizing
rent against short-run bottlenecks.
A 10% rise in household mean annual expenditures could be associated
with a 6.4% rise in ordinary rents, ceteris paribus. Intuitively, renting a
rent-controlled dwelling was much the same as owning it: a certain percentage
of increased expenditures went towards maintenance and capital improvements.
This was twice as elastic as the demand for furnished dwelling expenditures:
33% of an increase in total expenditures would be spent on housing for
furnished rent payers. Maintenance and repair expenditures for furnished
dwellings were paid by the landlord, so furnished rent elasticity did not
incorporate this effect.
VLD Comparison of Tenure for both HIECS
CAPMAS changed the variable for "tenure" between surveys. In the
1990/1991 HIECS, renters were either "ordinary renters" or furnished dwelling
renters, owners either "owned the whole building," or "owned an apartment."
"In-kind" provision by employers, and "other" were also included tenure
codes. The 1995/1996 HIECS has the same renter classification, but owners
can now be defined as those household heads who a) said they were owners
or b) purchased the dwelling only partly. A new code classification for
tenure relations was created to capture tenancy of children due to receipt of
a "gift," but this dummy variable cannot be assumed to be synonymous with
permanent ownership, and will be removed from "owner" category for the
tabulations below. "In-kind" tenure exists in the 1995/1996 HIECS, but the
practice has fallen dramatically, from 1067 cases in 1990/1991 to merely 66
cases in 1995/1996.
In terms of overall tenure relations in the country, the data show that
outright ownership is common, and much more prevalent in rural areas
compared to urban areas. See Table VI.2. In 1990/1991, about 64% of all
household heads owned the dwelling the household lived in, and only 23.5%
rented. Ordinary and furnished renters accounted for only 7.6% of rural
dwelling tenure, but 35% of urban dwelling tenure. In 1995/1996, owners were
70.5% of the sample (a consequence of the recent survey having a larger rural
representation), but in the rural areas almost 90% owned, in contrast to 51% in
the urban areas.
Tenure relationships were almost evenly split in Cairo (46.9% renters,
and 51.4% owners) and Alexandria (51.8% renters, 46.4% owners) in 1990/1991.
Since then, however, renting has become more common in these two major
cities: 68% of households are renters in Cairo, and 67% in Alexandria in the
1995/1996 HIECS. Over time, and especially in the larger cities, ownership has
become prohibitively expensive for many households.
In addition, the tenure category "In-kind" is separated from the other