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Title: Measuring subjective housing affordability using a data-driven discrete information approach: A case study of Selangor, Malaysia
A widely adopted measure of housing affordability is that households should spend no more than 30% of their household income on housing. However, this normative threshold is an arbitrary Great Depression-era guideline and may not be relevant today. This paper proposes a subjective indicator of housing affordability by introducing a method commonly used in the medical sciences. It utilizes discrete information to estimate a subjective affordability ratio that discriminates between subjective house-poor and non-house-poor households. We apply the proposed method to household-level data collected in Selangor, Malaysia, and show that the optimal cut-off point is 23.5%. This estimated value suggests a higher prevalence of house-poor households than is implied by the regularly assumed 30% threshold. In addition, we perform a sensitivity analysis and find the bias in the estimated cut-off point is close to zero.  more » « less
Award ID(s):
1921523
PAR ID:
10477485
Author(s) / Creator(s):
; ; ;
Corporate Creator(s):
Editor(s):
Taylor, Mark P.
Publisher / Repository:
Routledge
Date Published:
Journal Name:
Applied Economics Letters
Edition / Version:
1.0
Volume:
0
Issue:
0
ISSN:
1350-4851
Page Range / eLocation ID:
1-5
Subject(s) / Keyword(s):
Subjective housing affordability Youden index Optimal cutpoint Malaysia
Format(s):
Medium: X Size: 958.1KB Other: pdf
Size(s):
958.1KB
Sponsoring Org:
National Science Foundation
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