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Does UK social housing affect housing prices and economic growth? An application of the ARDL model

Author

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  • F Chorley
  • C Liu

Abstract

This paper aims to establish a relationship between social housing, house prices and the whole economy using ARDL models. We find that there is a negative relationship between social housing and house prices in the short run but no evidence in the long term. Additionally, social housing was found to be inversely related to the economic growth of the UK economy in the long run but not in the short run. Based on these findings, increasing social housing can benefit younger families with affordability issues in the short term without causing any long-term concerns in the housing market. However, it does not help economic growth in the long run. Therefore, the government must consider a balance of trade-off between the housing market and the whole economy.

Suggested Citation

  • F Chorley & C Liu, 2021. "Does UK social housing affect housing prices and economic growth? An application of the ARDL model," Economic Issues Journal Articles, Economic Issues, vol. 26(1), pages 21-43, March.
    • Handle: RePEc:eis:articl:121chorley
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    References listed on IDEAS

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    More about this item

    Keywords

    social housing; house prices; GDP; ARDL Bounds test; cointegration;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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