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Space matters: Understanding the real effects of macroeconomic variations in cross-country housing price movements

Space matters: Understanding the real effects of macroeconomic variations in cross-country housing price movements
Space matters: Understanding the real effects of macroeconomic variations in cross-country housing price movements
Changes in macroeconomic conditions can significantly determine directions and magnitudes of cross-country housing price movements. We demonstrate that such effects are consistently over-estimated when ‘spatial frictions’ are merely assumed, but are not explicitly modeled in the empirical framework. The extent of over-estimation bias has significant policy implications.
Macroeconomic adjustments, Spatial frictions, International housing market, Estimation bias, Spatial panel data
0165-1765
130-135
Duan, Kun
9f37c2f9-7f41-4c71-9790-16795820e7d6
Mishra, Tapas
218ef618-6b3e-471b-a686-15460da145e0
Parhi, Mamata
5e489f1d-9fe0-44b3-8027-bfa3ec6bfbd4
Duan, Kun
9f37c2f9-7f41-4c71-9790-16795820e7d6
Mishra, Tapas
218ef618-6b3e-471b-a686-15460da145e0
Parhi, Mamata
5e489f1d-9fe0-44b3-8027-bfa3ec6bfbd4

Duan, Kun, Mishra, Tapas and Parhi, Mamata (2018) Space matters: Understanding the real effects of macroeconomic variations in cross-country housing price movements. Economics Letters, 163, 130-135. (doi:10.1016/j.econlet.2017.11.035).

Record type: Article

Abstract

Changes in macroeconomic conditions can significantly determine directions and magnitudes of cross-country housing price movements. We demonstrate that such effects are consistently over-estimated when ‘spatial frictions’ are merely assumed, but are not explicitly modeled in the empirical framework. The extent of over-estimation bias has significant policy implications.

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More information

Accepted/In Press date: 27 November 2017
e-pub ahead of print date: 14 December 2017
Published date: February 2018
Keywords: Macroeconomic adjustments, Spatial frictions, International housing market, Estimation bias, Spatial panel data

Identifiers

Local EPrints ID: 417193
URI: https://eprints.soton.ac.uk/id/eprint/417193
ISSN: 0165-1765
PURE UUID: 51ab31d0-66e5-4acb-a788-d00bdd35bb9d

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Date deposited: 24 Jan 2018 17:30
Last modified: 01 Feb 2018 17:30

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Contributors

Author: Kun Duan
Author: Tapas Mishra
Author: Mamata Parhi

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