Hanushek & Quigley (1980) estimate a price elasticity of demand for housing, , ranging from -0.64 to -0.45. A separate study by Saiz (2010) estimates a supply elasticity of housing, , for large metros ranging from 0.6 to 5.45, with more land constrained metros having weaker supply elasticities. Lastly, Jackson (2016) measures a semi-elasticity of housing supply, , w.r.t. the number of housing regulations in a community ranging from -0.04 to -0.08.

A) Estimate a range of potential percent changes in price that might occur in response to a community adding one additional regulation to housing construction. Using the comparative statics analysis discussed in class. Show all work.

B) Who benefits from these regulations? Who is gets harmed? Please explain.