ON THE STABILITY OF HOUSING SECTOR INTERACTION: EVIDENCE FROM 42 METROPOLITAN AREAS*

ABSTRACT. Residential vacancy chain models based on White's (1971) application of Markov chain theory are used to simulate flows of housing vacancies through a set of interdependent housing market sectors. Measures of housing sector interaction are derived from such models. Our purpose here is to address the issue of time stationarity raised by their use. U.S. census data are available to calibrate such models at two, and sometimes three, points in time. Data from 42 different SMSAs are used to generate 56 cross-temporal comparisons with interobservation periods ranging from three to eight years. Stability of interaction is addressed from two perspectives–the sectoral perspective and the areawide perspective. Results are mixed and depend upon which measure of interaction is used, which perspective is addressed, and the duration of the interobservation period. However, within limits, findings support continued use of vacancy chain models.     

TRADE CENTER EVOLUTION IN THE GREAT PLAINS*

ABSTRACT Empirical analysis has lagged behind the impressive additions to the theoretical literature on trade center systems during the past 15 years. This study of the trade center system in Saskatchewan is an attempt to begin to redress the imbalance and to test some of the recently formulated theoretical propositions. Communities are identified according to functional classifications for 1961 and 1981 with the aid of a cluster analysis program, and the validity of the groupings are verified using multiple discriminant analysis. Changes in the size, spacing, and function of clusters and individual communities during the 20-year interval are described and an effort is made to prdvide explanations for the changes observed.     

A CONTEXTUAL ANALYSIS OF THE JOURNEY-TO-SHOP WITH PRICE UNCERTAINTY*

ABSTRACT In this paper we extend the contextual theory of demand to consider rational consumer behavior when the household must deal with some random fluctuation in the prices it faces. Prices at stores reflect “advertised specials,” which are potential cost reductions random across goods, and random in-store price changes, which can only be observed by visiting the store. Our theory of rational behavior includes: (1) calculation by the household of an ex ante plan for its planning period; (2) modification to take account of advertised specials; and (3) rational search behavior to take advantage of random fluctuations observable only on a given day. This theory utilizes an active cash balance as a buffer against random variations from planned daily expenditures, and reformulations of trip circuits to account for patterns of cost-minimizing search.