Valuing Owner-Occupied Housing: an empirical exercise using the American Community Survey (ACS) Housing files

In Aten (2017) the rental equivalence method was applied to the owner-occupied housing (OOH) stock in the United States to impute the flow of housing services for the period 2000-2015. The rents were based upon the American Community Survey and were broken into seven types of structure, vintage of construction, number of rooms and bedrooms and the home’s broad geographic location. This paper expands on that methodology in several ways. First it explores variations on the rental equivalence method, under the assumption that the rents of high value homes are unlikely to fully reflect the flow of services from these dwellings. Second, it estimates the value of OOH based upon variations of the typical user cost approach, and third, it shows results based on an opportunity cost approach. The last sections are brief summaries. One compares the Public Use Microdata Sample of the American Community Survey (PUMS-ACS) with underlying microdata observations of the ACS1 , and the other shows state-level results for the different estimates before, during and after the housing crisis.