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 University of Strathclyde Business School, Department of Economics in its series Working Papers with number 1207.
Length: 26 pages
Date of creation: Jun 2012
Date of revision:
Publication status: Published
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Web page: http://www.strath.ac.uk/economics/
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Population ageing; house prices; micro-simulation;
Other versions of this item:
- Chen, Yu & Gibb, Kenneth D. & Leishman, Chris & Wright, Robert E., 2012. "The Impact of Population Ageing on House Prices: A Micro-simulation Approach," IZA Discussion Papers 6668, Institute for the Study of Labor (IZA).
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-07-23 (Economics of Ageing)
- NEP-ALL-2012-07-23 (All new papers)
- NEP-URE-2012-07-23 (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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