A q Model of House Prices
AbstractThis paper develops a Tobin’s q model of house prices which shows that changes in interest rates, demography, and income are likely to have only temporary effects on house prices while house prices in the long run are determined by prices of developed land, value added taxes, stamp duties, and construction costs. Empirical estimates show that agricultural land prices are a proxy for urban land prices, which, together with construction costs are the key determinants of house prices in the long run.
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Bibliographic InfoPaper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 03-11.
Length: 28 pages
Date of creation: Jun 2011
Date of revision:
Contact details of provider:
Postal: Department of Economics, Monash University, Victoria 3800, Australia
Web page: http://www.buseco.monash.edu.au/eco/
More information through EDIRC
Find related papers by JEL classification:
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-07-13 (Agricultural Economics)
- NEP-ALL-2011-07-13 (All new papers)
- NEP-URE-2011-07-13 (Urban & Real Estate Economics)
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