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Speculative Bubble Spillovers across Regional Housing Markets

Author

Listed:
  • Ogonna Nneji
  • Chris Brooks
  • Charles W. R. Ward

Abstract

In this paper we determine whether speculative bubbles in one region in the United States can lead bubbles to form in others. We first apply a regime-switching model to determine whether speculative bubbles existed in the U.S. regional residential real estate markets. Our findings suggest that the housing markets in five of the nine census divisions investigated were characterized by speculative bubbles. We then examine the extent to which bubbles spill over between neighboring and more distant regions, finding that the transmission of speculative bubbles and nonfundamentals between regions is multidirectional and does not depend on contiguity or distance.

Suggested Citation

  • Ogonna Nneji & Chris Brooks & Charles W. R. Ward, 2015. "Speculative Bubble Spillovers across Regional Housing Markets," Land Economics, University of Wisconsin Press, vol. 91(3), pages 516-535.
    • Handle: RePEc:uwp:landec:v:91:y:2015:i:3:p:516-535
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    Citations

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    Cited by:

    1. Yunsong Xu & Jiaqi Li & Hanying Qi, 2022. "The Spatial Correlation Effect of Real-Estate Financial Risk in China: A Social Network Analysis," Sustainability, MDPI, vol. 14(12), pages 1-23, June.
    2. E. Netunaev B. & Е. Нетунаев Б., 2017. "Феномен Заразных Финансовых Пузырей // The Phenomenon Of Contagious Financial Bubbles," Финансы: теория и практика/Finance: Theory and Practice // Finance: Theory and Practice, ФГОБУВО Финансовый университет при Правительстве Российской Федерации // Financial University under The Government of Russian Federation, vol. 21(6), pages 154-165.
    3. P. S. Morawakage & G. Earl & B. Liu & E. Roca & A. Omura, 2023. "Housing Risk and Returns in Submarkets with Spatial Dependence and Heterogeneity," The Journal of Real Estate Finance and Economics, Springer, vol. 67(4), pages 695-734, November.
    4. Ying Fan & Abdullah Yavas, 2023. "Price Dynamics in Public and Private Commercial Real Estate Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 67(1), pages 150-190, July.
    5. Bell, Adrian R. & Brooks, Chris & Killick, Helen, 2022. "The first real estate bubble? Land prices and rents in medieval England c. 1300–1500," Research in International Business and Finance, Elsevier, vol. 62(C).
    6. Hu, Yang & Oxley, Les, 2018. "Bubble contagion: Evidence from Japan’s asset price bubble of the 1980-90s," Journal of the Japanese and International Economies, Elsevier, vol. 50(C), pages 89-95.
    7. Lan, Hao & Moreira, Fernando & Zhao, Sheng, 2023. "Can a house resale restriction policy curb speculation? Evidence from a quasi-natural experiment in China," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 841-859.
    8. Saeed Rasekhi & Zahra Mila Elmi & Milad Shahrazi, 2016. "Price Bubbles Spillover among Asset Markets: Evidence from Iran," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 20(4), pages 501-523, Autumn.

    More about this item

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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