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Commodity house prices

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  • Leung, Charles Ka Yui
  • Shi, Song
  • Tang, Edward Chi Ho

Abstract

This paper studies how commodity price movements have affected the local house prices in commodity-dependent economies, Australia and New Zealand. We build a geographically hierarchical empirical model and find the commodity prices influence local house prices directly and also indirectly through macroeconomic variables. The impacts of commodity price changes are analogous to “income shocks” rather than “cost shocks”. Regional heterogeneity is also observed in terms of differential dynamic responses of local house prices to energy versus non-energy commodity price movements. The results are robust to alternative approaches. Directions for future research are also discussed.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 49489.

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Date of creation: Sep 2013
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Handle: RePEc:pra:mprapa:49489

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Keywords: regional economies; energy versus non-energy commodity price; propagation mechanism; geographically hierarchical model; dynamic analysis;

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