Influences of Income Levels on Housing Demand: A Case of Low Income Earners in Eldoret Municipality, Kenya

Abstract

Evidences in Kenya shows that the provision of housing which are  affordable to a majority of the urban population poses a serious challenge to the local authority and central government. This study sought to investigate, demand elasticities for low income housing market of Eldoret Municipality in Kenya. This study was guided by utility theory of housing  market theoretical framework, and adopted stratified sampling to 260  heads of households from 100,209 households. Data were analyzed using  descriptive statistics, correlation analysis and regression analysis. The  study revealed that, 1% increase in the household.s income will increase  housing demand for the low-income households by 0.960 %. The study  therefore concluded that demand for housing is positively responsive to  income of the low-income households. The study points to the need for  promoting income generation activities to sustain demand, subsidizing of  housing services and provision of incentives for income generation  activities. Further research should be done, on demand elasticities for  owner occupant, and the present study can be replicated using time series data.

Key Words: Income levels, Demand Elasticities, Eldoret