Choice of Rental Housing in a Developing Economy: The Case Study of Korea

This study attempts to build a Korean rental housing choice model in which households choose their dwelling units using hierarchical logit analysis. The decision is viewed as a partial sequence process, beginning with the choice of rental housing tenure and finishing with a decision on the type of occupation. The study incorporates hedonic price technique into our hierarchical logit model in order to contribute an additional step in the urban spatial structure. In addition, it estimates permanent and transitory components of income through the instrumental variables method based on human capital theory. To compare our model with other models, the multinomial logit analysis is proposed.