Redesign AHURI 3M

Summary

This project redesigns the Australian Housing Market Microsimulation Model (AHURI-3M) to develop a contemporary policy tool that is capable of measuring the impact of economic and policy changes on drivers of housing supply and demand and tenure outcomes in Australian housing markets.


Project Number: 30396
Research Theme: Economics_Modelling
Project Leader: Wood, Gavin
Funding Year: 2007
Research Centre: RMIT-NATSEM

Description

The AHURI-3M model brings together the supply and demand components of the Australian housing system by estimating the prices and constraints faced by housing investors and housing consumers, given their income support payments (ISPs) and tax liabilities, and the resulting impacts on tenure outcomes (see Wood, Watson and Flatau, 2003; 2006).

While based on the AHURI-3M model framework, the proposed model contains several new features that will distinguish it from its predecessor. The proposed model was constructed using Wave 2 of the Household, Income and Labour Dynamics Australia (HILDA) Survey, which contains comprehensive data on both housing investors and consumers that will for the first time enable us to draw together both the supply and demand components of the housing system using one dataset. Wave 2 of the HILDA Survey was conducted in 2002. By using a more recent dataset, we were able to update the model such that it is based on more recent demographic and socioeconomic information on Australian households. The proposed model was built using 2006-07 parameters (deflated 2002 prices) to incorporate the recently implemented welfare-to-work and tax changes.

We expect the proposed model to be an important policy tool that can inform policy development by:

  • Helping policy-makers anticipate the national impacts of changes to policy parameters on tenure outcomes and the supply of housing and demand for housing assistance.
  • Estimating the budgetary costs or savings of proposed policy changes.
  • Measuring the vertical and horizontal equity of the incidence of housing assistance.
  • Facilitating a dynamic analysis of housing assistance.

More Information

Download now Research Paper: Redesigning AHURI's Australian Housing Market Microsimulation Model
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