Risk and return in the single-family housing market
AbstractThe tradeoff between risk and return in equity markets is well established. This paper examines the existence of the same tradeoff in the single-family housing market. For home buyers, who constitute about two-thirds of U.S. households, the choice about how much housing and which house to buy is a joint consumption/investment decision. Does this consumption/investment link negate the risk/return tradeoff within the single-family hosuing market? Theory suggests the link still holds. This paper supplies empirical evidence in support of that theoretical result.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 96-16.
Date of creation: 1996
Date of revision:
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