Explaining regional variation in equilibrium real estate prices and income
AbstractWe combine the real estate model of Potepan (1996) with the spatial equilibrium approach of Roback (1982) to prove the interdependency of housing prices, rental prices, building land prices and income via one simultaneous equilibrium analysis. Using unique cross-sectional data on the majority of German counties and cities for 2005, we estimate the equations in their structural and reduced form. The results show significantly positive interaction effects of income and real estate prices. Moreover, we can confirm model predictions concerning the majority of exogenous determinants. In particular, expectations about population development seem to be among the most important determinants of price and income disparities between regions in the long term.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Housing Economics.
Volume (Year): 21 (2012)
Issue (Month): 1 ()
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Web page: http://www.elsevier.com/locate/inca/622881
Regional housing markets; Spatial equilibrium analysis; Simultaneous equation; Germany;
Other versions of this item:
- Oliver Bischoff, 2010. "Explaining Regional Variation in Equilibrium Real Estate Prices and Income," Working Papers 036, Chair for Economic Policy, University of Hamburg.
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Housing Supply and Markets
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