RES555 Assignment 1 (The relationship between public goods in welfare economics and real estate market) PDF

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The relationship between public goods in welfare economics andreal estate market.The definition of welfare economics is the measurement of people behaviour which is it measuring the social welfare. Welfare economics also provides non practical framework that being used in public economics which some...

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The relationship between public goods in welfare economics and real estate market.

The definition of welfare economics is the measurement of people behaviour which is it measuring the social welfare. Welfare economics also provides non practical framework that being used in public economics which some objectives such as it helps in decision making. Besides, welfare economics is also helps in analysing social evaluation towards public policies where total society goods is increasing using social welfare basis. Nevertheless, welfare economics is a study about measuring, conducting and defining in an individual and society itself. For examples of welfare economics are transportation, facilities and amenities. Then, public goods can be defined as a service that provides to society for free by the public taxation. In addition, public goods and private goods are different where public goods are handled by government through the public taxation. There are some studies show on how welfare economics related to real estate market and the relationship between public goods in welfare economics and real estate. Welfare economics really affect the property prices and demands in an area where there is good social welfare, the area will be a good place to occupied or lived in. The first welfare economics made is facilities and amenities. Facilities and amenities are two different words but always been together because of these two words related to each other and has the same meaning. Facilities and amenities can be defined as a place or building that gives comfortable, happiness and satisfaction to people or known as consumers in living their basic life. There are some examples of facilities and amenities such as schools, public park, office building, hospitals and restaurant. These facilities can affect the real estate market and its value. When there are a lot of facilities, then the property value itself will be increasing. In an area, hospitals and schools. A study shows that the arrangement of the facilities influencing to a new location’s effectiveness and the bonds between both of it as together the spatial structure of the given branch of industry and services [ CITATION Rym \l 17417 ]. The presence of commercial buildings such as shopping complex and hotels and also educational buildings such as school and university leads the high attraction of demands at that area. The distance is also very important as the consumer easily to access to the facilities and amenities. A study shows that including amenities such as view, parks, schools and community services are attributing to influence of property value [ CITATION Lie13 \l 17417 ]. The other welfare economics that made is transportation. Transportation is very important in our daily life to make sure that we can access from a place to another place. Nowadays, people will consider transportation including public transport as a way or medium for them to get access to their workplace and their destination easily. Thus, transportation gives impact to property values as it will be considered for the main factor in development. The location is needed to be analysed by developer as it will be a high demand in residential housing market when there are good accessibilities in that area. A study shows that good location affects the conditions in which it will be conducted, inclusive of the size of operations based on how attractive the area is, the level of costs incurred and the productivity of the whole enterprise [ CITATION Rym \l 17417 ]. Developer will analyse in certain place and when there is a lot of accessibilities including transportation, it will be

easily to plan a development. Besides, the demands of getting properties in areas that has transportation facilities is high. Property prices also is increasing when there are a lot of public transport as it helps consumer to access to a place with no trouble. According to a study, it shows that basically, the theory of economic, the movements of house price is existing in the regional demographics and regional economics. For examples, population, GDP, housing inflation rate, RPGT and public transportation [ CITATION Moo14 \l 17417 ]. So the statement in the study also stated that public transportation affects the house price according to economics theory. Public transportation also affects the demands of real estate as it can give a lot of benefits to that area. In a nutshell, public goods in welfare economics give big impacts to the real estate market as the property price is increasing due to accessibilities that provided to that area such as facilities, amenities and public transportation. It is also effect on demands of real estate as it can easily to access when there is a public transportation to that particular location. In addition, location is a key to the investment in developing properties as the location itself that must be suitable and provides a lot of accessibilities to make sure demand of that area is high. Last but not least, welfare economics contributes to real estate market directly and indirectly.

References Liew, C., & Nuzul, A. H. (2013). The impact of location on housing prices : applying the Artificial Neural Network Model as an analytical tool . IJRET: International Journal of Research in Engineering and Technology, 2(10), 261-271. Moorthy, R., & Jeronn, N. (2014). Public Transportation Effect on the Rising of Property Prices in Malaysia : A Correlation Study of MRT Project. Review of Integrative Business & Economics Research, 3(2), 350-357. Rymarzak, M., & Siemińska, E. (2012). Factors affecting the location of real estate. Journal of Corporate Real Estate, 14(4), 214-225....