IDEAS home Printed from https://ideas.repec.org/p/grz/wpaper/2020-18.html
   My bibliography  Save this paper

Owner Occupied Housing, Inflation and Monetary Policy

Author

Listed:
  • Robert J. Hill

    (University of Graz, Austria)

  • Miriam Steurer

    (University of Graz, Austria)

  • Sofie R. Waltl

    (Luxembourg Institute of Socio-Economic Research, Luxembourg)

Abstract

The ECB and Eurostat have been trying to bring owner-occupied housing (OOH) into the Harmonized Index of Consumer Prices (HICP) for two decades without success. OOH is now back on the agenda as part of the ECB's new monetary-policy strategy. A fresh perspective is needed. We argue that a viable way forward is using a simplified version of the user-cost method. This would improve the harmonization of the HICP, help close the credibility gap between measured in inflation and the public's perception of it, and make it easier for the ECB to achieve its inflation target.

Suggested Citation

  • Robert J. Hill & Miriam Steurer & Sofie R. Waltl, 2020. "Owner Occupied Housing, Inflation and Monetary Policy," Graz Economics Papers 2020-18, University of Graz, Department of Economics.
    • Handle: RePEc:grz:wpaper:2020-18
    as

    Download full text from publisher

    File URL: https://unipub.uni-graz.at/obvugrveroeff/download/pdf/9635475?originalFilename=true
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sofie R. Waltl, 2019. "Variation Across Price Segments and Locations: A Comprehensive Quantile Regression Analysis of the Sydney Housing Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 47(3), pages 723-756, September.
    2. Robert J. Hill & Michael Scholz, 2018. "Can Geospatial Data Improve House Price Indexes? A Hedonic Imputation Approach with Splines," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(4), pages 737-756, December.
    3. Roger Koenker & Ivan Mizera, 2004. "Penalized triograms: total variation regularization for bivariate smoothing," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 66(1), pages 145-163, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Denisa Naidin & Sofie R. Waltl & Michael Ziegelmeyer, 2022. "Objectified Housing Sales and Rent Prices in Representative Household Surveys: the Impact on Macroeconomic Statistics," LISER Working Paper Series 2022-03, Luxembourg Institute of Socio-Economic Research (LISER).
    2. Lopez, Luis A. & Yoshida, Jiro, 2022. "Estimating housing rent depreciation for inflation adjustments," Regional Science and Urban Economics, Elsevier, vol. 95(C).
    3. Robert J. Hill & Norbert Pfeifer & Miriam Steurer & Radoslaw Trojanek, 2024. "Warning: Some transaction prices can be detrimental to your house price index," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 70(2), pages 320-344, June.
    4. Manner, Hans & Rodríguez, Gabriel & Stöckler, Florian, 2024. "A changepoint analysis of exchange rate and commodity price risks for Latin American stock markets," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 1385-1403.

    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. HILL Robert J. & STEURER Miriam & WALTL Sofie R., 2018. "Owner Occupied Housing in the CPI and Its Impact On Monetary Policy During Housing Booms and Busts," LISER Working Paper Series 2018-05, Luxembourg Institute of Socio-Economic Research (LISER).
    2. Anthony Lepinteur & Sofie R. Waltl, 2020. "Tracking Owners’ Sentiments: Subjective Home Values, Expectations and House Price Dynamics," Department of Economics Working Papers wuwp299, Vienna University of Economics and Business, Department of Economics.
    3. Charlier, Isabelle & Paindaveine, Davy & Saracco, Jérôme, 2015. "Conditional quantile estimation based on optimal quantization: From theory to practice," Computational Statistics & Data Analysis, Elsevier, vol. 91(C), pages 20-39.
    4. Otto-Sobotka, Fabian & Salvati, Nicola & Ranalli, Maria Giovanna & Kneib, Thomas, 2019. "Adaptive semiparametric M-quantile regression," Econometrics and Statistics, Elsevier, vol. 11(C), pages 116-129.
    5. Julian Granna & Wolfgang Brunauer & Stefan Lang, 2022. "Proposing a global model to manage the bias-variance tradeoff in the context of hedonic house price models," Working Papers 2022-12, Faculty of Economics and Statistics, Universität Innsbruck.
    6. Mats Wilhelmsson, 2019. "Energy Performance Certificates and Its Capitalization in Housing Values in Sweden," Sustainability, MDPI, vol. 11(21), pages 1-16, November.
    7. Daniel Melser & Robert J. Hill, 2019. "Residential Real Estate, Risk, Return and Diversification: Some Empirical Evidence," The Journal of Real Estate Finance and Economics, Springer, vol. 59(1), pages 111-146, July.
    8. Kholodilin, Konstantin A. & Limonov, Leonid E. & Waltl, Sofie R., 2021. "Housing rent dynamics and rent regulation in St. Petersburg (1880–1917)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 81.
    9. Robert J. Hill & Alicia N. Rambaldi & Michael Scholz, 2021. "Higher frequency hedonic property price indices: a state-space approach," Empirical Economics, Springer, vol. 61(1), pages 417-441, July.
    10. Monica Pratesi & M. Ranalli & Nicola Salvati, 2009. "Nonparametric -quantile regression using penalised splines," Journal of Nonparametric Statistics, Taylor & Francis Journals, vol. 21(3), pages 287-304.
    11. Kaplan, David M., 2015. "Improved quantile inference via fixed-smoothing asymptotics and Edgeworth expansion," Journal of Econometrics, Elsevier, vol. 185(1), pages 20-32.
    12. Robert S. Martin, 2025. "Democratic Aggregation: Issues and Implications for Consumer Price Indexes," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 71(1), February.
    13. Ahlfeldt, Gabriel M. & Heblich, Stephan & Seidel, Tobias, 2023. "Micro-geographic property price and rent indices," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    14. R. H. Ilyasov & V. A. Plotnikov, 2022. "Oil Production and Carbon Emissions: Spline Analysis of Relationships," Administrative Consulting, Russian Presidential Academy of National Economy and Public Administration. North-West Institute of Management., issue 5.
    15. Athanasios Tsagkanos & Konstantinos Gkillas & Christoforos Konstantatos & Christos Floros, 2021. "Does Trading Volume Drive Systemic Banks’ Stock Return Volatility? Lessons from the Greek Banking System," IJFS, MDPI, vol. 9(2), pages 1-13, April.
    16. Meng Yuan & Hongjuan Wu, 2024. "Positive or Negative: The Heterogeneities in the Effects of Urban Regeneration on Surrounding Economic Vitality—From the Perspective of Housing Price," Land, MDPI, vol. 13(5), pages 1-27, May.
    17. Mele, Angelo, 2013. "Poisson indices of segregation," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 65-85.
    18. Ismail, Muhammad & Warsame, Abukar & Wilhelmsson, Mats, 2020. "Measuring Gentrification with Getis-Ord Statistics and Its Effect on Housing Prices in Neighboring Areas: The Case of Stockholm," Working Paper Series 20/19, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    19. Roger Koenker, 2017. "Quantile regression 40 years on," CeMMAP working papers 36/17, Institute for Fiscal Studies.
    20. Lan Zhou & Huijun Pan, 2014. "Smoothing noisy data for irregular regions using penalized bivariate splines on triangulations," Computational Statistics, Springer, vol. 29(1), pages 263-281, February.

    More about this item

    Keywords

    Measurement of inflation; Owner occupied housing; User cost; Rental equivalence; Hedonic quantile regression; Housing booms and busts; Inflation targeting; Disinflation puzzle; Leaning against the wind; Secular stagnation.;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:grz:wpaper:2020-18. 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: Stefan Borsky (email available below). General contact details of provider: https://edirc.repec.org/data/vgrazat.html .

    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.