The Impact of Population Ageing on House Prices: A Micro-simulation Approach
AbstractThis paper attempts to estimate the impact of population ageing on house prices. There is considerable debate about whether population ageing puts downwards or upwards pressure on house prices. The empirical approach differs from earlier studies of this relationship, which are mainly regression analyses of macro time-series data. A micro-simulation methodology is adopted that combines a macro-level house price model with a micro-level household formation model. The case study is Scotland, a country that is expected to age rapidly in the future. The parameters of the household formation model are estimated with panel data from the British Household Panel Survey covering the period 1999-2008. The estimates are then used to carry out a set of simulations. The simulations are based on a set of population projections that represent a considerable range in the rate of population ageing. The main finding from the simulations is that population ageing – or more generally changes in age structure – is not likely a main determinant of house prices, at least in Scotland.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6668.
Length: 27 pages
Date of creation: Jun 2012
Date of revision:
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Other versions of this item:
- Yu Chen & Kenneth Gibb & Chris Leishman & Robert Wright, 2012. "The Impact of Population Ageing on House Prices: A Micro-simulation Approach," Working Papers 1207, University of Strathclyde Business School, Department of Economics.
- J1 - Labor and Demographic Economics - - Demographic Economics
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-07-08 (Economics of Ageing)
- NEP-ALL-2012-07-08 (All new papers)
- NEP-CMP-2012-07-08 (Computational Economics)
- NEP-DEM-2012-07-08 (Demographic Economics)
- NEP-URE-2012-07-08 (Urban & Real Estate Economics)
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- Renuga Nagarajan & Aurora A.C. Teixeira & Sandra T. Silva, 2013. "The impact of an ageing population on economic growth: an exploratory review of the main mechanisms," FEP Working Papers 504, Universidade do Porto, Faculdade de Economia do Porto.
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