The four quadrants of DiPasquale and Wheaton (1992)
The four quadrants of DiPasquale and Wheaton (1992). The notation of quadrant 3 follows the original; textbooks often write the relationship the other way round as C = f(P), which says the same thing in substance. Source: DiPasquale and Wheaton (1992, 1996).
| Quadrant | Market | What is determined | Equation | In words |
|---|---|---|---|---|
| 1 (top right) | Space: rent determination | Rent R for a given stock S and economy E | D(R, E) = S | Rent is the level at which the demand for space equals the stock |
| 2 (top left) | Assets: valuation | Price P from rent R and capitalisation rate i | P = R / i | Value is rent divided by the required return, which comes from the capital market |
| 3 (bottom left) | Assets: new construction | Construction volume C at which price equals replacement cost | P = f(C) | Construction continues until price equals construction cost including land; construction costs rise with construction volume |
| 4 (bottom right) | Space: stock adjustment | Change in the stock | ΔS = C − δS | The stock grows with new construction and shrinks with demolition and depreciation (δ); in equilibrium S = C / δ |
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PAM Research & Analytics (2026). The four quadrants of DiPasquale and Wheaton (1992). In: How the Surinamese property market works. https://pamnv.com/data/en/four-quadrants-of-dipasquale-and-wheaton-1992-suriname.html