I have historical data on occupancy rates for a given neighborhood, along with characteristics and other local economic variables.
I am looking to estimate the regression equation with occupancy rates as dependent variable and price, level of supply, characteristics and economic vars as independent variables.
D(p) = Rent + Median Income + Supply + # of HH
- Median Income is time fixed effect.
My questions are:
- How do you interpret the equilibrium price from the regression output? i.e price at which Occupancy rate is 100%. or price elasticity of demand.
- Interaction term. Given that supply follows rental prices, add
supply * rentas interaction term.
- What other regression methods would make sense for this problem?