An ardl model of the demand for housing in barbados

This study provides empirical estimates for the demand for new housing in Barbados using time series data for the period 1965-2004. An Autoregressive Distributed Lag (ARDL) modelling process is employed to capture the effect of prices, income, interest rates and demographic factors on demand. The computed elasticities indicate that income is the most significant variable in explaining the demand for new housing. The price of housing has no measurable impact, which would indicate that the ability to service one’s mortgage may be more critical to the householder. The results of the study can be used to guide government policy.