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The Spatial Diffusion of Regional Housing Prices across U.S. States

  • Ryan Brady

    ()

    (United States Naval Academy)

In this paper I estimate the spatial diffusion of housing prices across U.S. states over a period from 1975 to 2011, showing how long and to what magnitude state-level housing prices are affected by a price shock emanating from surrounding states. I capture the spatial diffusion of regional housing prices with impulse response functions estimated directly from a single equation spatial autoregressive model. In addition, I compare and contrast spatial impulse response estimates across sub-regions and then over sub-periods. Results show that for the 1975 to 2011 period spatial diffusion of housing prices is statistically significant and persistent across states. Moreover, sub-region estimation shows the spatial diffusion is persistent in the four Census regions for the United States. Sub-period estimation, too, suggests the magnitude and persistence of spatial diffusion may be more pronounced after 1999 than before.

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File URL: http://www.usna.edu/EconDept/RePEc/usn/wp/usnawp45.pdf
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Paper provided by United States Naval Academy Department of Economics in its series Departmental Working Papers with number 45.

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Length: 57 pages
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:usn:usnawp:45
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