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Housing and Economic Adjustment

Author

Listed:
  • Arthur Grimes
  • Suzi Kerr
  • Andrew Aitken

Abstract

Housing is the most important component of wealth for many New Zealanders. Its location is fixed and its value is influenced by economic and other factors specific to that location. Hence when people live in owner-occupied homes their wealth is strongly associated with their local economic conditions. Housing is also a major factor in influencing migration decisions and, hence, regional mobility. To shed light on the behaviour of the New Zealand housing market, we examine the dynamic and long run responses of house values across spatial communities and across time to economic variables that impact on the local economy. We use a specially constructed QVNZ-sourced database for house prices and house sales, and a range of explanatory variables constructed consistently across TLA and Regional Council levels.

Suggested Citation

  • Arthur Grimes & Suzi Kerr & Andrew Aitken, 2003. "Housing and Economic Adjustment," Urban/Regional 0310006, EconWPA.
  • Handle: RePEc:wpa:wuwpur:0310006
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    References listed on IDEAS

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    1. Case, Karl E. & Mayer, Christopher J., 1996. "Housing price dynamics within a metropolitan area," Regional Science and Urban Economics, Elsevier, vol. 26(3-4), pages 387-407, June.
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    6. Can, Ayse, 1992. "Specification and estimation of hedonic housing price models," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 453-474, September.
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    8. Dubin, Robin A., 1992. "Spatial autocorrelation and neighborhood quality," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 433-452, September.
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    10. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    11. Dr Justin van de Ven, 2004. "Does Means Testing Exacerbate Early Retirement?," National Institute of Economic and Social Research (NIESR) Discussion Papers 244, National Institute of Economic and Social Research.
    12. Dennis R. Capozza & Patric H. Hendershott & Charlotte Mack & Christopher J. Mayer, 2002. "Determinants of Real House Price Dynamics," NBER Working Papers 9262, National Bureau of Economic Research, Inc.
    13. Dennis R. Capozza & Charlotte Mack & Patric H. Hendershott & Christopher J. Mayer, 2002. "The Determinants of House Price Dynamics," ERES eres2002_106, European Real Estate Society (ERES).
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    Citations

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    Cited by:

    1. Arthur Grimes & Andrew Aitken, 2004. "What's the Beef with House Prices? Economic Shocks and Local Housing Markets," Working Papers 04_08, Motu Economic and Public Policy Research.
    2. Suzi Kerr & Andrew Aitken & Arthur Grimes, 2004. "Land Taxes and Revenue Needs as Communities Grow and Decline: Evidence from New Zealand," Working Papers 04_01, Motu Economic and Public Policy Research.
    3. Grimes, Arthur, 2005. "Regional and industry cycles in Australasia: Implications for a common currency," Journal of Asian Economics, Elsevier, vol. 16(3), pages 380-397, June.
    4. Phil Briggs, 2007. "Lessons learned from the Economics Department's research work on household balance sheets and related issues," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 70, December.
    5. International Monetary Fund, 2007. "New Zealand; Selected Issues," IMF Staff Country Reports 07/151, International Monetary Fund.
    6. Arthur Grimes, 2005. "Intra & Inter-Regional Industry Shocks: A New Metric with an Application to Australasian Currency Union," Macroeconomics 0509019, EconWPA.
    7. Michelle Poland & David C Maré, 2005. "Defining Geographic Communities," Urban/Regional 0509016, EconWPA.
    8. Roger Bowden, 2004. "McHouse prices, capital hoovering, and real exchange rate exposures," New Zealand Economic Papers, Taylor & Francis Journals, vol. 38(1), pages 119-139.
    9. Arthur Grimes & Suzi Kerr & Andrew Aitken, 2004. "Bi-Directions Impacts of Economic, Social and Environmental Changes and the New Zealand Housing Market," Working Papers 04_09, Motu Economic and Public Policy Research.
    10. Arthur Grimes & Robert Sourell & Andrew Aitken, 2005. "Regional Variation in Rental Costsfor Larger Households," Urban/Regional 0509014, EconWPA.
    11. Viv B. Hall & John McDermott, 2006. "The Ups and Downs of New Zealand House Prices," Working Papers 06_03, Motu Economic and Public Policy Research.
    12. David C Maré, 2005. "Indirect Effects of Active Labour Market Policies," HEW 0509004, EconWPA.
    13. Fabling, Richard & Grimes, Arthur, 2005. "Insolvency and economic development: Regional variation and adjustment," Journal of Economics and Business, Elsevier, vol. 57(4), pages 339-359.
    14. Arthur Grimes & Andrew Aitken & Suzi Kerr, 2004. "House Price Efficiency: Expectations, Sales, Symmetry," Urban/Regional 0408001, EconWPA.
    15. Suzi Kerr & Andrew Aitken & Arthur Grimes, 2004. "Land Taxes and Revenue Needs as Communities Grow and," Public Economics 0403001, EconWPA.

    More about this item

    Keywords

    economic adjustment; housing; New Zealand;

    JEL classification:

    • R - Urban, Rural, Regional, Real Estate, and Transportation Economics

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