How would you work out the change in number of new homes bought on floodplains?

1. New homes built on floodplains each year	Income quintile
	Bottom	Second	Middle	Fourth	Top	Total
Baseline
New home planned to be built on floodplains by income quintile, number pa	8000	7200	4500	2300	3000	25000
Average price of new homes built on floodplains,	120000	180000	232000	315000	820000	259380
Option X
Climate Change Levy (% of baseline price)	5%	5%	5%	5%	5%
Average price including Levy,	126000	189000	243600	330750	861000	272349
Price elasticity of demand (PED)	-0.90	-0.70	-0.20	-0.10	0.00
Change in number of new homes bought on floodplains						0
Remaining new homes built and sold on floodplains	8000	7200	4500	2300	3000	25000

Answer rating: 100% (QA)

To calculate the change in the number of new homes bought on floodplains we need to consider the cha... View the full answer