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Local Political Power and Housing Bubble in Spain


  • Esteban, Marisol

    (University of the Basque Country (UPV/EHU))

  • Altuzarra, Amaia

    () (University of the Basque Country (UPV/EHU))


This paper provides empirical evidence of the role of local politicians in the development of the housing bubble in Spain. It intends to determine empirically whether different political ideologies matter and whether municipalities run by different political parties show housing bubbles of different intensity. We work with all municipalities over 25,000 inhabitants. We measure political ideology according to the political party to which the mayor of a municipality belongs. The housing bubble is proxied by the stock of unsold new dwellings. The results suggest an association between the local political ideology and existing unsold new dwellings. Municipalities governed by right-wing mayors have a higher number and share of unsold new dwellings than those governed by centre-left and left-wing mayors.

Suggested Citation

  • Esteban, Marisol & Altuzarra, Amaia, 2016. "Local Political Power and Housing Bubble in Spain," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 35, pages 107-127.
  • Handle: RePEc:ris:invreg:0319

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    More about this item


    empty dwellings; housing bubble; local power;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure


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