Revisiting metropolitan house price-income relationships
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A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
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en
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21
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Journal of Housing Economics, Volume 61
Abstract
We explore long-term patterns of the house price-income relationship across the 70 largest U.S. metropolitan areas. In line with a standard spatial equilibrium model, our empirical findings indicate that regional house price-income ratios are typically not stable, even over the long run. In contrast, panel regression models that relate house prices to aggregate personal income and allow for regional heterogeneity yield stationary long-term relationships in most areas. The house price-income relationship varies significantly across locations, underscoring the importance of using estimation techniques that allow for spatial heterogeneity. The substantial regional differences are closely related to the elasticity of housing supply.Description
Funding Information: For helpful comments, we thank the editor Jeff Zabel and two anonymous reviewers, as well as Christian Hilber, Simon Lapointe and Oskari Vähämaa, and participants at the International AREUEA conference in Amsterdam, ARES conference in San Diego, ERSA conference in Cork, ERES conference in Delft, Annual Meeting of the Finnish Economic Association, and research seminar at the University of Cambridge. We also thank Andrew VanValin for preparing the maps. This work was supported by the Strategic Research Council at the Academy of Finland (first author; decision numbers 352450 and 352451) and the West-Finland Housing Association of Public Utility. Funding Information: For helpful comments, we thank the editor Jeff Zabel and two anonymous reviewers, as well as Christian Hilber, Simon Lapointe and Oskari Vähämaa, and participants at the International AREUEA conference in Amsterdam, ARES conference in San Diego, ERSA conference in Cork, ERES conference in Delft, Annual Meeting of the Finnish Economic Association, and research seminar at the University of Cambridge. We also thank Andrew VanValin for preparing the maps. This work was supported by the Strategic Research Council at the Academy of Finland (first author; decision numbers 352450 and 352451 ) and the West-Finland Housing Association of Public Utility . Publisher Copyright: © 2023 The Author(s)
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Oikarinen, E, Bourassa, S C, Hoesli, M & Engblom, J 2023, 'Revisiting metropolitan house price-income relationships', Journal of Housing Economics, vol. 61, 101946. https://doi.org/10.1016/j.jhe.2023.101946