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Does Inequality Really Matter in Forecasting Real Housing Returns of the United Kingdom?

Author

Listed:
  • Hossein Hassani

    (The Statistical Research Centre, Bournemouth University, Bournemouth, UK)

  • Mohammad Reza Yeganegi

    (Department of Statistics, Shahid Chamran University of Ahvaz, Ahvaz, Iran)

  • Rangan Gupta

    (Department of Economics, University of Pretoria, Pretoria, South Africa)

Abstract

In this paper, we analyze the potential role of growth in inequality for forecasting real housing returns of the United Kingdom (UK). In our forecasting exercise, we use linear and nonlinear models, as well as, measures of absolute and relative consumption and income inequalities at quarterly frequency over the period of 1975 to 2016. Our results indicate that, while nonlinearity in the data generating process of real housing returns is important, growth in inequality does not necessarily carry important information in forecasting the future path of housing prices in the UK.

Suggested Citation

  • Hossein Hassani & Mohammad Reza Yeganegi & Rangan Gupta, 2018. "Does Inequality Really Matter in Forecasting Real Housing Returns of the United Kingdom?," Working Papers 201859, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201859
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    Cited by:

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    2. Marilena Mironiuc & Elena Ionașcu & Maria Carmen Huian & Alina Țaran, 2021. "Reflecting the Sustainability Dimensions on the Residential Real Estate Prices," Sustainability, MDPI, vol. 13(5), pages 1-28, March.
    3. Berisha, Edmond & Meszaros, John & Gupta, Rangan, 2023. "Income inequality and house prices across US states," The Quarterly Review of Economics and Finance, Elsevier, vol. 91(C), pages 192-197.
    4. Abebe Hailemariam & Sefa Awaworyi Churchill & Russell Smyth & Kingsley Tetteh Baako, 2021. "Income inequality and housing prices in the very long‐run," Southern Economic Journal, John Wiley & Sons, vol. 88(1), pages 295-321, July.

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    More about this item

    Keywords

    Income and Consumption Inequalities; Real Housing Returns; Forecasting; Linear and Nonlinear Models; United Kingdom;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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