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Convergence In Provincial-Level South African House Prices: Evidence From The Club Convergence And Clustering Procedure

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  • Nicholas Apergis
  • Beatrice D. Simo-Kengne
  • Rangan Gupta

Abstract

type="main" xml:lang="en"> This empirical study analyzes the long run behavior of provincial house prices in South Africa based on the club convergence and clustering procedure of Phillips and Sul. Using quarterly data covering the period of 1976Q2–2012Q4, 1974Q1–2012Q4 and 1977Q3–2012Q4 for the large, medium, and small middle segments of the housing market, respectively, we test the law of one price across nine provinces. The empirical findings suggest that the nine provinces do not form a homogeneous convergence club. Unlike the small middle segment, which consists of two convergence clubs of seven and two provinces, the large and medium middle segments have three convergence clubs corresponding to three segmented independent local markets. Possible intuitive explanations for the existence of such clubs are discussed and resulting policy implications provided.

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  • Nicholas Apergis & Beatrice D. Simo-Kengne & Rangan Gupta, 2015. "Convergence In Provincial-Level South African House Prices: Evidence From The Club Convergence And Clustering Procedure," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 27(1), pages 2-17, March.
    • Handle: RePEc:bla:revurb:v:27:y:2015:i:1:p:2-17
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    Cited by:

    1. Holmes, Mark J. & Otero, Jesús & Panagiotidis, Theodore, 2019. "Property heterogeneity and convergence club formation among local house prices," Journal of Housing Economics, Elsevier, vol. 43(C), pages 1-13.
    2. Tsai, I-Chun, 2018. "House price convergence in euro zone and non-euro zone countries," Economic Systems, Elsevier, vol. 42(2), pages 269-281.
    3. Jin Hu & Xuelei Xiong & Yuanyuan Cai & Feng Yuan, 2020. "The Ripple Effect and Spatiotemporal Dynamics of Intra-Urban Housing Prices at the Submarket Level in Shanghai, China," Sustainability, MDPI, vol. 12(12), pages 1-17, June.
    4. Mateusz Tomal, 2022. "Testing for overall and cluster convergence of housing rents using robust methodology: evidence from Polish provincial capitals," Empirical Economics, Springer, vol. 62(4), pages 2023-2055, April.
    5. Beatrice D. Simo-Kengne & Lumengo Bonga-Bonga, 2020. "House prices and fertility in South Africa: A spatial econometric analysis," Economics Bulletin, AccessEcon, vol. 40(4), pages 3193-3210.
    6. Rajesh Raj & Rath D.P., 2022. "House Price Convergence: Evidence from India [Convergence des prix des logements : le cas indien]," Working papers 893, Banque de France.
    7. Hernán Enríquez Sierra & Jacobo Campo Robledo & Antonio Avendaño Arosemena, 2015. "Relaciones regionales en los precios de vivienda nueva en Colombia," Revista Ecos de Economía, Universidad EAFIT, vol. 19(40), pages 25-47, June.
    8. Yuanyuan Cai & Yingming Zhu & Marco Helbich, 2022. "Club convergence of regional housing prices in China: evidence from 70 major Cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(1), pages 33-55, August.
    9. Raj Rajesh & Deba Prasad Rath, 2023. "House price convergence: evidence from India," Asia-Pacific Journal of Regional Science, Springer, vol. 7(3), pages 721-747, September.

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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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