The Influences of Housing Prices on Residential Mobility and Unemployment

A change of housing price has great impact on households’ housing equity and further moving decision. Some previous studies reveal that whether owning a home is an important factor of residential mobility, and a declining housing price may cause mobility lock-in effect and higher unemployment (Henely1998; Hsieh et al. 2003; Zabel 2012; Blozea and Skak 2016). However, some other studies find that the influences of housing price on residential mobility and unemployment are not significant as expected (Engelhardt 2003; Coulson and Grieco 2013; Vallentta 2013) or the influences are only significant in a smaller regional level but not significant in a national level (Modestino and Dennet 2013). This study reexamines their relationship by using panel cointegration method and the city level panel data during 1994 and 2017 in Taiwan. The empirical results reveal that housing price are cointegrated with migration and unemployment, and the influences of housing price on migration and unemployment are significantly positive and negative respectively in the long run. However, the influences of housing price on migration and unemployment are not as significant as expected in the short run. We used quantile regression to further examine their short run relationships. It shows that the influence of housing price on migration and unemployment might be asymmetric.