earticle

영어

The purposes of this article are to analyze the motives and effects of vertical disintegration of the housing construction industry in Daegu metropolitan city. In particular this article examines the effects of vertical disintegration on the apartment selling price of the housing construction company. It is argued that the vertical disintegration of the housing industry has been primarily triggered by the development of upstream land market and caused by rising internal transaction costs of land in the housing construction firms. Also, the study demonstrates that the vertical disintegration increases the initial apartment selling price of the housing construction firms in terms of theoretical and empirical aspects. This study indicates that the main factor of the high apartment selling price is the double marginalization of the imperfect competitive housing market. On the other hand the excessive demand for land in the upstream market is argued to be a secondary factor. In the context of welfare issue the study indicates that the vertical disintegration of the housing market may decrease welfare of consumers as well as producers. Thus, it is argued that the vertical integration policy may be recommended by reducing internal transaction costs in the housing industry. However, the present disintegrated housing production market may be a supplementary system in which some unfavorable problems should be remedied.