Econometric modelling or institutionalism? A review of the main approaches in analyses of housing regulations

Abstract

The powerful rhetoric of western housing literature examining the effects of regulations on housing
provision has had a major influence on the housing policies of developing countries. The mainstream
literature adopts neo-classical econometric modelling as the main approach in understanding how
housing provision is affected by regulations. Oftentimes, such analyses would reach an unfavourable
conclusion regarding the inflationary and restrictive effects of regulations and consequently call for
deregulation. Nevertheless, the research approach in the mainstream literature has overlooked the roles
and behaviours of housing agents involved in the actual creation of urban landscapes. In other words,
these actors and their social interactions within the regulatory environment have been put in the
proverbial ‘black box’. Aiming to obtain deeper understanding on the effects of housing regulations,
other researchers have proposed an alternative approach that opens this processual ‘black box’ to explain,
rather than generalise the effects of regulations. Using institutionalism as the basis for analysis, this
second group of literature provides a deeper explanatory analysis of housing regulations. This paper’s
contribution to existing literature lies not only in the systematic review of relevant housing regulation
literature, but also in suggesting an alternative approach to understand the effects of housing regulation.
Keywords: housing regulations, housing literature, research approach