Original Article
Productivity in the US Housing Industry: Total Factor and Public Firms
Abstract
Productivity is widely recognized as one of the main contributors to increased economic and societal wellbeing. Unfortunately, productivity has been extremely difficult to operationalize in a repeatable context in the construction sector. The result is a lack of consensus on the basic question of whether there has been improvement or decline in the productivity of the sector. This study focuses on productivity in the housing industry. Productivity is especially important in this industry, as in addition to providing shelter, the housing market is the primary source of wealth accumulation in the US. An individual’s ability to enter this market will be a function of affordability which will be effected by the productivity of the industry. The combination of academic and societal impacts suggests that there is a need to address a fundamental question: what is the status of productivity in the housing industry. In order to address this question a data
base was compiled from the 10-Ks of the largest, long lived, US companies in the single family housing industry. The result is a panel data set that consists of information on 11 firms over a 15-year period. These 11 firms were responsible for approximately 25% of all new home sales in any given year. The data set was analysed with random effects GLS time series regression. The results indicate that, at best, the housing industry has seen negligible total productivity growth.
Keywords: Productivity, Housing, Panel Data Analysis