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Does inequality really matter in forecasting real housing returns of the United Kingdom?

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  • Hassani, Hossein
  • Yeganegi, Mohammad Reza
  • Gupta, Rangan

Abstract

In this paper, we analyze the potential role of growth in inequality for forecasting real housing returns of the United Kingdom. In our forecasting exercise, we use linear and nonlinear models, as well as measures of absolute and relative consumption and income inequalities at quarterly frequency over the period 1975–2016. Our results indicate that, while nonlinearity in the data generating process of real housing returns is important, growth in inequality does not necessarily carry important information in forecasting the future path of housing prices in the United Kingdom.

Suggested Citation

  • Hassani, Hossein & Yeganegi, Mohammad Reza & Gupta, Rangan, 2019. "Does inequality really matter in forecasting real housing returns of the United Kingdom?," International Economics, Elsevier, vol. 159(C), pages 18-25.
    • Handle: RePEc:eee:inteco:v:159:y:2019:i:c:p:18-25
    DOI: 10.1016/j.inteco.2019.03.004
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    1. Aye, Goodness C. & Balcilar, Mehmet & Bosch, Adél & Gupta, Rangan, 2014. "Housing and the business cycle in South Africa," Journal of Policy Modeling, Elsevier, vol. 36(3), pages 471-491.
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    Cited by:

    1. Afees A. Salisu & Rangan Gupta, 2019. "How do Housing Returns in Emerging Countries Respond to Oil Shocks? A MIDAS Touch," Working Papers 201946, University of Pretoria, Department of Economics.

    More about this item

    Keywords

    Income and consumption inequalities; Real housing returns; Forecasting; United Kingdom;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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