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Objectified Housing Sales and Rent Prices in Representative Household Surveys: the Impact on Macroeconomic Statistics

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  • Denisa Naidin
  • Sofie R. Waltl
  • Michael Ziegelmeyer

Abstract

Reliable macroeconomic housing and wealth statistics as well as counterfactual analyses across housing tenure status require hypothetical sales and rent prices for properties off the market reflecting current market conditions and representing the entire housing stock. We replace subjective values reported by participants in the Luxembourg Household Finance and Consumption Survey by objectified values imputed via hedonic models estimated on observable market data. We find that the participants’ tendency to over- and under-report values is strongly correlated with tenure length, tenure type, type of dwelling, household income and wealth. We find shifts in the wealth distribution, detect large regional variation in price-to-rent, price-to-income and rent-to-income ratios as well as stark affordability concerns: only 18% of all renting households could theoretically afford to purchase the dwelling they rent given current market conditions. These renters are usually younger, placed at the top of the wealth and income distribution, and reside outside Luxembourg City.

Suggested Citation

  • 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).
    • Handle: RePEc:irs:cepswp:2022-03
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    Cited by:

    1. Thomas Y. Mathä & Ana Montes-Viñas & Giuseppe Pulina & Michael Ziegelmeyer, 2023. "The Luxembourg Household Finance and Consumption Survey: Results from the fourth wave in 2021," BCL working papers 176, Central Bank of Luxembourg.
    2. Anthony Lepinteur & Giorgia Menta & Sofie R. Waltl, 2023. "Equal Price for Equal Place? Demand-Driven Racial Discrimination in the Housing Market," LISER Working Paper Series 2023-09, Luxembourg Institute of Socio-Economic Research (LISER).

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    More about this item

    Keywords

    Macroeconomic Statistics; Housing Wealth; Subjective Assessments; Affordability; Surveys; Measurement Errors; Housing and Rent Markets;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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