Resource title

Real effects of regional house prices: dynamic panel estimation with heterogeneity

Resource image

image for OpenScout resource :: Real effects of regional house prices: dynamic panel estimation with heterogeneity

Resource description

This paper uses recently developed methods for estimating dynamic heterogeneous cointegrated panel data models - which allows for heterogeneity in parameters and dynamics across agents - to study housing wealth effects in a dynamic model of the 50 US states and the District of Columbia from the 1970s to the 1990s. The results show that housing prices have a unit root and are cointegrated with consumption. Even though an aging population has some effect on consumption in some states, it cannot account for the heterogeneity in housing wealth elasticities. Finally, we find that when state heterogeneity is taken into account, housing capital gains translate into increased spending with an elasticity ranging from 0.15 to 0.23.

Resource author

Resource publisher

Resource publish date

Resource language

en

Resource content type

application/pdf

Resource resource URL

http://eprints.lse.ac.uk/24704/1/dp493.pdf

Resource license