Fertility and female wages: A new link via house prices

The analysis in this paper explains a new link between fertility and female wages that occurs through the effect of house prices. It is well known that higher female wages have an ambiguous effect on fertility: the positive income effect is offset by a negative substitution effect due to the higher opportunity cost of the maternal time required for child-rearing. Here it is shown that housing costs add a new dimension to this relationship. If the housing needs of children are a sufficiently important cost of child-rearing, then other costs of child rearing such as the opportunity cost of maternal time are rendered relatively less important. Hence the negative substitution effect of higher female wages on fertility is weaker, implying that higher female wages are more likely to boost fertility. This effect is stronger when the housing supply elasticity is high since house prices, and hence the costs of children, are kept in check. The analysis here helps to reconcile empirical observations about fertility, female wages and house prices in a number of countries. For governments concerned about low fertility, policies to increase housing supply elasticity in order to keep house prices in check would be helpful.     

Population and house prices in the United Kingdom

Real house prices rise in the United Kingdom amid growing concern of an impending correction. The rate of household formation has increased with strong population growth, due to elevated rates of natural increase and net migration, and lack of growth in average household size, due to a rise in single‐person households with population ageing. This paper presents an overlapping generations model of housing, endogenous labour, savings and growth to analyse the effect of an increase in the household formation rate and speculative demand under rational expectations on house prices in a general equilibrium. We find that real house prices rise over time if the rate of household formation outstrips the rate of housing supply, but do not follow a speculative bubble path in the long run. The results explain why the upward trend in real house prices reflects market fundamentals and has continued despite population ageing as the number of working and retired households grows relative to the number of older people seeking to sell.     

Relationships among regional housing markets: Evidence on adjustments of housing burden

High regional house prices relative to income may result in residents moving to other regions with lower housing burden; this generates relationships among regional housing markets. From this perspective, this study employed Markov-switching models to examine housing affordability in 10 regional housing markets in the UK. The results show that levels of housing burden among regions are related, thereby proving that a high cost of housing burden in one region may result in residents buying houses in other regions. Moreover, this study found that house prices in most regions tend to converge with income levels but are asymmetric within the period of convergence. Specifically, because the period of high housing loans lasts longer, and vice versa, housing demand increases as soon as house prices drop. Thus, periods of “inexpensive” house prices do not last long. This paper explains why living costs in different regions are related, and proposes that housing demands may have asymmetric reactions when house prices are too high or too low.     

Educational attainment,growth and poverty reduction within the MDG framework: simulations and costing for the Peruvian case

Using quarterly data, 1999:Q2–2009:Q3, we empirically examine the key macro determinants of housing prices for China’s residential market. Employing Granger causality and Vector Auto-Regression (VAR) models, we find that there exists strong bivariate causality between house price increases and its determinants. The variance decomposition suggests that speculative factors reflected by past increases in real house price contribute a relatively larger proportion to house price rises relative to fundamental factors.     

Inflation,minimum wage and other wages: an econometric study on French macroeconomic data

This study examines the set of interdependences between the formation of wages, prices and the minimum wage (SMIC) through a vectorial error correction model estimated on French quarterly macroeconomic data covering the 1970–1/1999-4 period. Two periods are distinguished: the period of inflation rise from 1970 to 1981, which coincides with an important squeeze of the wage range, measured by the ratio of the minimum wage to the hourly wage rate; the period of disinflation since 1981, that has been concomitant with a stability of wage inequalities. Disinflation has hardly benefited the evolution of the SMIC which has always profited by price rises, in real and relative terms, which have become less strong. This evolution does not benefit any more on wage rises, when the interdependences between variables are taken into account. The SMIC seems however to have gained in efficiency as an instrument on wage disparity reduction. It rises are finally more persistent in real terms and relatively to the other salaries and have always as little inflationary impact on wages as on prices.     

ECONOMIC GROWTH AND INCREASING HOUSE PRICES

Abstract.  Several cities and countries in Asia and North America have experienced large increases in housing prices. We extend the 1991 paper by S. Rebelo to simulate this situation. We show that growth in real housing prices can result as economic growth persists, even when population growth is zero. Another finding is that reported increases in housing prices might be underestimated. In particular, the growth rate of a relative price index may converge to zero even when house prices in real terms display sustained growth.     

限购背景下存准率与房价的关系研究

2010年以来,我国主要的大中城市纷纷出台了商品房的限购政策,同期法定存款准备金率也多次调整.在限购政策背景下,本文运用广义矩(GMM)方法,将限购政策作为逻辑变量加入到估计模型中,对限购背景下的存款准备金率调整与商品房价格的关系进行了定量分析.结果表明,限购政策对于抑制房价过快上涨具有显著意义,同时,政府上调存款准备金率在滞后2期和3期时对于抑制商品房价格过快上涨也具有一定的积极作用,但商品房价格不会因存款准备金率的上调而出现急速下跌,而是在存款准备金率持续上调的过程中呈现出先上涨后下跌,再上涨、再下跌的交替变化特征.研究同时发现,限购政策和存款准备金率调整对于我国东部地区城市影响显著,而对于中西部城市影响则不显著.基于此,本文提出了运用存款准备金率手段在抑制商品房价格过快上涨过程中的对策建议.     

The Role of Chonsei as a Price Protector in the Korean Housing Market

In this study, we investigate whether ‘Chonsei,’ the distinctive type of housing contract system in Korea, has a favorable impact on house prices during a market downturn. We show the mechanism in which Chonsei prevents a sharp drop in house prices based on sellers’ loss aversion behavior. Moreover, using data on the Seoul condominium (i.e. apartment) market during the 2006–2017 period, we find that Chonsei prices have a negative impact on the housing trade volume in a market recession. This finding is consistent with our argument that loss aversion behavior appears with regard to the rise in Chonsei prices and thereby Chonsei functions as a price protector in the Korean housing market.     

收入差距、挤出效应与高房价

本文考察了收入差距的扩大对城市房价的影响。研究表明,收入差距的扩大在微观上通过挤出效应、在宏观上通过储蓄率的上升引发过度住房投资,助长了房价。无论是用基尼系数表征的收入差距,还是用高收入阶层所占总收入的比例表征的收入差距,在经验分析上都与高房价高度正相关。这意味着改善收入分配或通过各种手段限制高收入者的住房投资需求应成为房地产调控的政策选择。     

THE ROLE OF HOUSE PRICES IN THE MONETARY TRANSMISSION MECHANISM ACROSS EUROPEAN COUNTRIES

This paper provides a discussion of the ‘housing market’ channels of the monetary transmission mechanism and offers some evidence of institutional differences in the European housing and mortgage markets. Using a number of Vector Autoregressive models, estimated individually for nine European countries over the pre‐EMU period, we find that house prices are significantly affected by interest rate shocks. The relative role of these interest‐rate‐induced fluctuations in house prices for private consumption is then investigated. We show that house prices may enhance the effects of interest rate shocks on consumer spending in those economies where housing and mortgage markets are relatively more developed and competitive.     

中国城镇居民住房销售面积的多因素分析

自20世纪90年代以来,中国房地产业持续高速发展,并且成为了中国经济发展的引擎和典型性支柱产业。近年来城市房价涨得过快、房价过高,已是一个不争的事实。根据目前房地产业的状况,从计量经济学的角度解释说明居民平均货币工资,商品房屋销售住宅均价,房地产开发建设竣工房屋面积,国民生产总值对商品住宅房屋销售总面积的影响程度,继而从中发现值得深思的问题。     

HOUSING IN A NEOCLASSICAL GROWTH MODEL

We present evidence that in the USA, the relative price of housing exhibits secular growth and that its growth rate is a stationary series. The ratio of the value of house stock to either consumption or GDP is also stationary. We develop a two‐sector neoclassical growth model with housing that is consistent with these facts. Among the long‐run determinants of the growth of housing prices and housing stock per capita are factor intensities, rates of technological progress in both the housing and non‐housing sectors, and the excess of population growth over land growth. We also study the model's transitional dynamics.     

Population Ageing and House Prices in Australia

This article assesses the effect of population ageing on housing consumption and house prices. Using two approaches, this article finds that the ageing of the population may cause average real house prices to be between 3 and 27 per cent lower than they otherwise would be over the period 2008–2050. The first approach is an econometric estimation of house prices for Australia over the period 1980–2008. The second approach is a simulation of a life cycle‐optimising model with representative overlapping generations.     

Has Canadian house price growth been excessive?

The dramatic rise in the ratio of Canada's average house price to average rent has led to speculation that there is a bubble in the Canadian housing market. Others have argued, however, that the currently high level of house prices may be rationalized by the low cost of financing, given the decline in interest rates over the last two decades. In this article, we assess these arguments through the lens of a simple asset pricing model applied to city‐level data. We quantify the extent to which excess growth in Canadian house prices depends on the nature of the current regime governing real interest rates, expectations of rent growth in different cities and variations in property taxes.     

Regional variations in US consumer response to price changes in home heating fuels: the Northeast and the South

This paper considers the paradox of a consistent net outflow of people from areas of high job creation and wages over the past 20 years and suggests the explanation that different individuals have different motivations for moving. The Labour Force Survey indicates that workers moving for job reasons have migrated to areas of low unemployment and high nominal wages. However, the inflow into such areas has been more than compensated for by an outflow of people moving for non-job reasons. A logit analysis of destination choice indicates that job movers are attracted to areas with high wages but are not affected by high house prices in such areas. In contrast, active non-job movers are deterred from areas of high house prices. Regional house price differences do not influence the destination choice of homemakers or the terminally sick but they do influence the destination choice of retirees. All groups prefer to travel the least distance when moving.     

Ripple effect in house prices and trading volume in the UK housing market: New viewpoint and evidence

This study adopts the data of house prices and trading volume in the overall UK housing market and in the housing markets in the 10 major regions in the UK to estimate the ripple effect in the trading activities in the housing markets. First, this study details why the ripple effect occurs in the housing market price and volume using static and cobweb dynamic models. The results of the panel-based unit root tests indicate that the relative price and volume ratios show constancy, signifying that long-run equilibrium relationships exist between the regional and national housing markets in the UK. The frequency of the transaction volume convergence behavior is higher than that of the overall house prices.     

THE RENT-PRICE RATIO FOR THE AGGREGATE STOCK OF OWNER-OCCUPIED HOUSING

We construct a quarterly time series of the rent-price ratio for the aggregate stock of owner-occupied housing in the United States, starting in 1960, by merging micro data from the last five Decennial Censuses of Housing surveys with price indexes for house prices and rents. We show that the rent-price ratio ranged between 5 and 5.5 percent between 1960 and 1995, but rapidly declined after 1995. By year-end 2006, the rent-price ratio reached a historic low of 3.5 percent. For the rent-price ratio to return to its historical average over, say, the next five years, house prices likely would have to fall considerably.     

What drives housing dynamics in China? A sign restrictions VAR approach

We study housing dynamics in China using vector autoregressions identified with theory-consistent sign restrictions. We study seven potential drivers: (1) population increases; (2) a relaxation of credit standards, for example, due to the shadow banking system; (3) increasing preferences towards housing, for example, due to a housing bubble, or to housing being a status asset in the marriage market; (4) an increase in the savings rate; (5) expected productivity progress; (6) changes in land supply; and (7) tax policy, a proxy for policy stimulus. Our results show that, even if all shocks play relevant roles, productivity, savings glut, and policy stimulus have been the dominant drivers. When the sample is closer to 2014, housing preferences and credit shocks increase their importance to explain house prices and volume, while population shocks explain a larger share of the dynamics of residential investment. The results show some differences if we use house price indices constructed by the government or by private sources. The official indices show smaller increases in house prices and assign a smaller role to credit and preference shocks.     

Labor-Leisure Choice and Relative Income Concerns in the Shadow of the Housing Market

We theoretically examine the connection among labor productivity, work time, and housing costs in an economy with households differing in wages and neighborhoods differing in quality. We argue that the location rent component of housing cost is key to explicating the connection. We trace how the housing market makes relative income instrumental for maximizing utility even if households’ utility functions are not interdependent. Over time, productivity growth yields higher wages but households compete some of that away on the housing market. This structural inflation of location rents counteracts preferences to work less as wages rise and hinders the expansion of leisure. Relative income effects are shown to arise as a consequence of a market institution that monetizes socially-imbued preferences.     

Estimating fundamental and affordable housing price trends: a study based on Singapore

Policy-makers often impose some cooling measures on the housing market when housing prices rise fast. Such policies yield limited success if housing prices are driven up by fundamentals. Estimating a fundamental price trend from observed price data is a challenge. We present an empirical methodology to separate housing price trends into fundamental and affordable components. Deviating from the common practice, we replace current income by a long-run income measure constructed from household incomes at different quantiles. This income measure provides a more suitable basis for constructing affordable house price levels. It also serves as a better fundamental variable, especially for segmented housing markets like that of Singapore. These price trends provide policy-makers with useful information to intervene into property markets to achieve desirable outcomes. Analysing Singapore data using this methodology shows the magnitudes of the price gaps between actual and fundamental prices and how housing affordability fluctuates over price cycles.