David M. Blank

English

Research Papers in Economics

This PDF is a selection from an out-of-print volume from the National Bureau of Economic
Research
Volume Title: The Volume of Residential Construction, 1889-1950
Volume Author/Editor: David M. Blank
Volume Publisher: UMI
Volume ISBN: 0-87014-454-5
Volume URL: http://www.nber.org/books/blan54-1
Publication Date: 1954
Chapter Title: Appendix E Description of Procedure for Obtaining Estimates of Urban Residential
Construction Based on Population-Change Relationships
Chapter Author: David M. Blank
Chapter URL: http://www.nber.org/chapters/c7018
Chapter pages in book: (p. 86 - 88)APPENDIX E
DESCRIPTIONOF PROCEDURE FOR OBTAINING ESTIMATES OF
URBAN RESIDENTIAL CONSTRUCTION BASED ON
POPULATION-CHANGE RELATIONSHIPS
THEFOLLOWING description of the derivation of the estimates for the Middle
Atlantic division is presented as an illustration of the technique used in
obtaining regional building totals based on decade changes in population
(excluding annexations). For all size classes in all years except size class
III, 1896-98, and size class IV, 1890-98 and 1921-29, the estimates of
residential construction volume for each size class were obtained by applying
to the sample data the ratio of the decade change in population (excluding
annexations) of the size class to the decade change in population (excluding
annexations) of the reporting cities.1
Estimates for city size class IV, 1890-98, were based on ratios between
five-year aggregate building rates of size class IV, 1900-1904, and five-year
rates for size class III, 1900-1 Theseratios were applied to the building
rates in city size class III in each year, 1890-98, to obtain estimated building
rates for size class IV for the same years. The ratios were:
Dwelling units 1.28
Permit valuation of dwelling units 1.92
Permit valuation of nonhousekeeping facilities 0.68
For size class III, 1896-98, estimates were derived from ratios between
five-year aggregate building rates of size class III, 1900-04, and five-year
rates for size class II in the same period. The ratios were applied to building
rates for size class II for each of the three years, 1896-98, to yield estimated
building rates for size class III in 1896-98. The ratios were:
Dwelling units 0.73
Permit valuation of dwelling units 0.61
Permit valuation of nonhousekeeping facilities 1.59
The estimates for size class IV, 1921-29, were based on average ratios
between five-year aggregate building rates for size class IV in 1910-14 and
1915-19 and five-year rates for size class III in the same periods. The ratios
were applied to building rates for size class III in each year, 1921-29, to
1Theadjustment for lapses of permits in New York City, described in Appendix F, was made
in the sample data prior to expansion.
2The aggregate building rates were calculated as the ratio of the number of dwelling units
started or the permit value of dwelling units started or the permit value of nonhousekeeping
facilities started per person change in population over the decade (excluding annexed population).
• 86obtain estimated building rates for size class IV in the same years. The
average ratios were:
Dweffing units 0.93
Permit valuation of dweffing units 1.11
Permit valuation of nonhousekeeping facilities 0.23
Estimates for the Pacific division, 1890-99, and the South Atlantic di-
vision, 1920-29, were computed in a different manner. In the Pacific division,
no data were available for any size class prior to 1895. To obtain a rough
estimate of the volume of residential construction during the five years,
1890-94, recourse was had to unpublished Federal Housing Administration
data on deeds recorded in three California counties —Alameda,Los Angeles,
and San Francisco. The principal cities in these counties —Oakland,Los
Angeles, and San Francisco —accountedfor two thirds of the increase in
urban population of the Pacific division during the decade 1890-99. The
three series listing the annual number of deeds recorded in each county,
1890-99, were combined into a weighted index (1895-99100), with the
weights consisting of the decade increase in population of the principal cities
of the counties. The 1895-99 annual average volume of urban residential
construction, previously estimated on the basis of population change data,
was extrapolated back to 1890 by this weighted index.
The decade total of urban dwelling units started in the Pacific division,
derived in this manner, was then compared with an estimate of the increase
in urban private families (now called households) in this division between
1890 and 1900, derived from Census data. The increase in urban families,
or occupied units, over a given period is not synonymous with the number
of new dwelling units constructed because of demolitions, conversions, an-
nexations, etc. Nevertheless, the family data provided a means of obtaining
a rough check on the accuracy of the order of magnitude of the synthetic
construction series. The comparison indicated that the dwelling unit series
for this decade, and probably, therefore, the permit valuation series for
housekeeping and nonhousekeeping structures for the same period, was
considerably understated.
Since the estimates for the last half of the decade were based on a very
small sample, it was unreasonable to assume that the error was confined to
the synthetic series for the first half of the decade. Accordingly, the series
for the entire decade were adjusted upward to reduce the apparent under-
estimate in the decade totals.It is likely that the revised estimates for this
decade are still too low.
The adjustment was derived in the following manner: The ratio of the
number of dwelling units started in the Pacific division during the years
1900-1909, as estimated on the population change basis, to the increase in
urban population of this region, based on the 1900 urban classification, was
calculated. This ratio was then applied to the increase in urban population,
871890-99, based on the 1890 city classification, to yield the estimated total
of dwelling units started during that decade. The ratio of this decade total
to the decade total based partially on the deeds' recorded index was 1.66.
Accordingly, the previous estimates of dwelling units started, of permit valua-
tion of dwelling units, and of permit valuation of nonhousekeeping facilities
were multiplied by the factor 1.66. The resulting series was accepted as the
final urban series for the Pacific division for this decade.
Although the final estimates for the Pacific division for the decade 1890-99
were extremely crude, it should be remembered that the magnitudes involved
were very small and that errors in the final series would affect the national
totals only slightly. The final estimates of residential construction for the
Pacific division ran about 1 or 2 per cent of the final national urban totals
and a considerably smaller percentage of the final nonf arm totals for the
bulk of the decade. Even a 25percent error in the Pacific estimates would
result in an error of much less than 1 per cent in the national totals. The
estimates for the Pacific division were made primarily to enable consistent
national urban and nonfarm estimates to be derived for the 1890 decade,
rather than as an accurate representation of residential building in this
division.
For the South Atlantic division, separate estimates were made for Florida
and for the remainder of the division for the 1920-29 decade.3 This pro-
cedure was followed to prevent the Florida real estate boom from having any
effect on the estimates for the remainder of the division, as well as on the
correction factors for the East South Central division which were derived
from the South Atlantic data.
8Anadjustment was made for lapses in permits in Florida for 1925 and 1926. This adjustment
is discussed in Appendix F.
• 88

The Volume of Residential Construction, 1889-1950

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