IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v248y2025ics0165176525000795.html
   My bibliography  Save this article

Place-based policy and spillovers in the housing market

Author

Listed:
  • Kim, Hayoung

Abstract

In response to soaring housing prices during the COVID-19 pandemic, some governments imposed bans on investor purchases in hot housing markets, raising concerns that such place-based regulations would shift investment demand to adjacent, non-regulated areas. This study examines a ban on rental-purpose purchases in South Korea and finds that the regulation leads to price declines in both regulated and adjacent areas, demonstrating a price spillover effect: an 8.9 % decrease in the regulated area and a 5.2 % decrease in adjacent areas. Moreover, there is no statistical evidence of demand displacement or increased transaction volumes in adjacent areas, while the investor ban is associated with a 25.6 % decline in transaction volumes within the regulated zone. These findings suggest that price spillover effects outweigh displacement effects in heated housing markets, indicating that place-based policies can effectively curb real estate price increases despite concerns about investment demand displacement.

Suggested Citation

  • Kim, Hayoung, 2025. "Place-based policy and spillovers in the housing market," Economics Letters, Elsevier, vol. 248(C).
    • Handle: RePEc:eee:ecolet:v:248:y:2025:i:c:s0165176525000795
    DOI: 10.1016/j.econlet.2025.112242
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176525000795
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2025.112242?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Cameron,A. Colin & Trivedi,Pravin K., 2013. "Regression Analysis of Count Data," Cambridge Books, Cambridge University Press, number 9781107667273, September.
    2. repec:bla:jfinan:v:44:y:1989:i:3:p:719-730 is not listed on IDEAS
    3. Robert J. Shiller, 1989. "Comovements in Stock Prices and Comovements in Dividends," Journal of Finance, American Finance Association, vol. 44(3), pages 719-729, July.
    4. Somerville, Tsur & Wang, Long & Yang, Yang, 2020. "Using purchase restrictions to cool housing markets: A within-market analysis," Journal of Urban Economics, Elsevier, vol. 115(C).
    5. repec:bla:jfinan:v:44:y:1989:i:3:p:719-29 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luiz Paulo Fávero & Joseph F. Hair & Rafael de Freitas Souza & Matheus Albergaria & Talles V. Brugni, 2021. "Zero-Inflated Generalized Linear Mixed Models: A Better Way to Understand Data Relationships," Mathematics, MDPI, vol. 9(10), pages 1-28, May.
    2. Riccardo (Jack) Lucchetti & Luca Pedini, 2020. "ParMA: Parallelised Bayesian Model Averaging for Generalised Linear Models," Working Papers 2020:28, Department of Economics, University of Venice "Ca' Foscari".
    3. Landry, Craig E. & Shonkwiler, J. Scott & Whitehead, John C., 2020. "Economic Values of Coastal Erosion Management: Joint Estimation of Use and Existence Values with recreation demand and contingent valuation data," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    4. Mónica Moreno-Gutiérrez & Víctor Hernández-Trejo & Ramón Valdivia-Alcalá & Judith Juárez-Mancilla & Plácido Roberto Cruz-Chávez & Ulianov Jakes-Cota, 2024. "Linking Tourist Willingness to Pay and Beach Management: A Travel Cost Analysis for Balandra Marine Park, Mexico," Tourism and Hospitality, MDPI, vol. 5(4), pages 1-20, October.
    5. Andrey Pavlov & Tsur Somerville & Jake Wetzel, 2024. "Foreign buyer taxes and housing affordability," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 52(3), pages 928-950, May.
    6. Benjamin M. Blau & Todd G. Griffith & Ryan J. Whitby, 2020. "Opacity and the comovement in the stock prices of banks," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(4), pages 3557-3580, December.
    7. Ghosh, Prasenjit & Rong, Jian & Khanna, Madhu & Wang, Weiwei & Miao, Ruiqing, 2017. "Have They Gone with the Wind? Indirect Effects of Wind Turbines on Bird Abundance," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258100, Agricultural and Applied Economics Association.
    8. Mullahy, John, 2024. "Analyzing health outcomes measured as bounded counts," Journal of Health Economics, Elsevier, vol. 95(C).
    9. Michel Beine & Ilan Noy & Christopher Parsons, 2021. "Climate change, migration and voice," Climatic Change, Springer, vol. 167(1), pages 1-27, July.
    10. Christian Kleiber & Achim Zeileis, 2016. "Visualizing Count Data Regressions Using Rootograms," The American Statistician, Taylor & Francis Journals, vol. 70(3), pages 296-303, July.
    11. D M Zimmer, 2023. "The effect of food stamps on fibre intake," Economic Issues Journal Articles, Economic Issues, vol. 28(2), pages 71-86, September.
    12. Jasna Atanasijević & Miloš Božović, 2016. "Exchange Rate as a Determinant of Corporate Loan Defaults in a Euroized Economy: Evidence from Micro-Level Data," Eastern European Economics, Taylor & Francis Journals, vol. 54(3), pages 228-250, May.
    13. Syed Muhammad All-E-Raza Rizvi & Marie-Ange Véganzonès-Varoudakis, 2019. "Economic, social, and institutional determinants of domestic conflict in fragile States," Working Papers hal-02340977, HAL.
    14. Kyriakos Drivas & Constantine Iliopoulos, 2017. "An Empirical Investigation in the Relationship Between PDOs/PGIs and Trademarks," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(2), pages 585-595, June.
    15. Bu, Nanyang & Shen, Wen & Guo, Xiangyu, 2025. "From premium to discount: A quasi-natural experiment in Shanghai's judicial auction housing market," Finance Research Letters, Elsevier, vol. 77(C).
    16. J. M. C. Santos Silva & Silvana Tenreyro, 2022. "The Log of Gravity at 15," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 21(3), pages 423-437, September.
    17. Vidhura Tennekoon, 2017. "Counting unreported abortions: A binomial-thinned zero-inflated Poisson model," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 36(2), pages 41-72.
    18. Holger Breinlich & Dennis Novy & J. M. C. Santos Silva, 2024. "Trade, Gravity, and Aggregation," The Review of Economics and Statistics, MIT Press, vol. 106(5), pages 1418-1426, September.
    19. Rik Rozendaal & Herman Vollebergh, 2025. "Policy-Induced Innovation in Clean Technologies: Evidence from the Car Market," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 12(3), pages 565-598.
    20. Oliver Westerwinter, 2021. "Transnational public-private governance initiatives in world politics: Introducing a new dataset," The Review of International Organizations, Springer, vol. 16(1), pages 137-174, January.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:248:y:2025:i:c:s0165176525000795. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.