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Do house prices impact business starts?

  • Balasubramanyan, Lakshmi
  • Coulson, Edward

At the national level, business starts and housing prices both fell dramatically over the 2007–2009 period. Using a proprietary database of business starts this paper quantitatively models the interaction between house price and business starts from 2005 to 2009. We identify the impact by exploiting the cross-sectional variation in house price changes during the period. Controlling for observable and unobservable city characteristics, we find the significance of a robust relationship between house prices and business starts depends on the size of the business starts; a robust link exists between house prices and very small business, whereas, no significant robust link is seen for large business starts.

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Article provided by Elsevier in its journal Journal of Housing Economics.

Volume (Year): 22 (2013)
Issue (Month): 1 ()
Pages: 36-44

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Handle: RePEc:eee:jhouse:v:22:y:2013:i:1:p:36-44
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