A depth of wealth, lifetime income, or permanent income is required. The model must also be adjusted to explanation for the heterogeneousness of real estate. This can be done by deconstructing the utility function. If home casework (X4) is separated into the components that comprise it (Z1,Z2,Z3,Z4,...Zn), then the utility function can be rewritten as U=U(X1,X2,X3,(Z1,Z2,Z3,Z4,...Zn)...Xn) By varying the bounty of housing services (X4) and precise for points of choice utility, that household's demand schedule for stopping place services can be constructed. Chain Store demand is calculated by summing all individual household demands.
A production function such as Q=f(L,N,M) can be constructed in which Q is the quantity of houses produced, N is the amount of labour Visit employed, L is the amount of land used, and M is the gob of other materials. This production function must, however, be adjusted to detail for the refurbishing and augmentation of existing buildings. To do this a second production function is constructed that includes the stock of existing housing, and their ages, as determinants. The two functions are summed pliable the total production function. Alternatively an hedonic pricing model can be regressed.