Estimating a Stock-Flow Model for the Swiss Housing Market
Abstract
This paper analyzes the development of housing market imbalances, housing prices and residential investment in Switzerland within a stock-flow framework. In the long run, the desired level of residential capital stock and the existing residential capital stock revert. Empirical results indicate, however, that housing demand can diverge from the existing supply for several years due to the slow adjustment of the residential capital stock to shocks. In the short run, the market therefore has to be cleared by price adjustments. And indeed, it can be shown empirically that changes in prices are significantly and strongly dependent on the level of stock imbalances. Furthermore, housing prices prove to be an important determinant of residential investment, which in turn drives the adjustment process of the residential capital stock towards its desired level.Download Info
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Article provided by Swiss Society of Economics and Statistics (SSES) in its journal Swiss Journal of Economics and Statistics.
Volume (Year): 146 (2010)
Issue (Month): III (September)
Pages: 601-627
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Related research
Keywords: housing demand; housing supply; residential investment; market disequilibrium; housing prices;Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- 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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