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Housing and behavioural factors

Author

Listed:
  • John H. Huston
  • Roger W. Spencer

Abstract

The field of behavioural finance is well established. Studies of housing bubbles are less common than studies of equity overvaluation and studies of the behavioural aspects of real-estate pricing are rare. This article examines the housing market from 1987 to the present with particular attention to the 2003 to 2007 bubble. Both behavioural and traditional variables are considered. Models with behavioural variables are seen to provide a better fit during the housing bubble. A state-space model shows that the coefficients on those behavioural variables vary in ways consistent with the emergence and dissipation of the recent housing bubble.

Suggested Citation

  • John H. Huston & Roger W. Spencer, 2014. "Housing and behavioural factors," Applied Economics Letters, Taylor & Francis Journals, vol. 21(3), pages 215-219, February.
    • Handle: RePEc:taf:apeclt:v:21:y:2014:i:3:p:215-219
    DOI: 10.1080/13504851.2013.849374
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    References listed on IDEAS

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    1. George A. Akerlof, 2009. "How Human Psychology Drives the Economy and Why It Matters," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1175-1175.
    2. Robert J. Shiller, 2007. "Understanding recent trends in house prices and homeownership," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 89-123.
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