The Feasibility of Estimating the Demand

for Residential Mortgage Credit in Poland

25

4.0

SPECIFICATION OF DEMAND MODELS IN POLAND AND OTHER TRANSITION

COUNTRIES:  BARRIERS TO ESTIMATION

There are a number of issues to be addressed with regard to the demand for

housing, the demand for credit, and related housing and financial issues in Poland.  Some

factors relate to the estimation methodology; others relate to the available macroeconomic

and microeconomic data. Key issues include the following:

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The traditional models utilized for estimation of demand equations need to be

modified, if possible, to take better account of the barriers to effective

demand that is, the gap between potential and effective demand in Poland

and in the other transition countries.  As a first step, policy studies should be

carried out to better understand demand in a transition economy setting; as a

related step, suggestions for statistical adjustments are presented in annex I.

!

The macroeconomic data now available in Poland are not adequate to support

estimation of macroeconomic demand models (formal statistical models) for

either housing or mortgage credit.  A critique is presented in annex II.

!

Fairly substantial sets of microeconomic data already exist in Poland; these can

be utilized for descriptive analyses of housing.  However, there is no single

household data set that contains all the requisite information.  Rather, the data

needed for estimation (again, of formal statistical models) are either scattered

across numerous different surveys or not collected at all (there are no data on

mortgage credit, for example, and insufficient data on income and wealth).  This

precludes the type of approach necessary for estimation of the basic parameters

of the demand for housing and the demand for credit.

23

4.1

Potential and Effective Demand in Poland

Among the key questions to be addressed are the following:

1. How does one define  potential demand  and  effective demand  in operationally

meaningful ways for (a) housing and (b) mortgage credit?

2. How can potential and effective demand be measured?

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As was discussed above with regard to the AHS and SCF, estimation of multivariate statistical

models necessary for the basic analyses that Poland needs depends on household surveys where a complete

set of information is obtained for each household in the chosen sample.  As it is, Poland's micro data preclude the

use of the type of regression analyses necessary.