Measuring a boom and bust: The Sydney housing market 2001–2006

The Sydney housing market peaked in 2003. The period 2001–2006 is, therefore, of particular interest since it captures a boom and bust in the housing market. We compute hedonic, repeat-sales and median price indexes for five regions in Sydney over this period. While the three approaches are in broad agreement regarding the timing of the turning point in the housing market, some important differences also emerge. In particular, we find evidence of sample selection bias in our hedonic and repeat-sales data sets (with the former focusing more on better quality dwellings and the latter more on lower quality dwellings). These sample selection biases could in turn cause bias (in opposite directions) in our hedonic and repeat-sales indexes. Median indexes may likewise be biased as a result of an apparent decline in the average quality of dwellings sold in the latter part of the sample. We also find evidence of convergence in prices across regions during the boom and divergence in the subsequent bust.     

Managing hedonic housing price indexes: The French experience

Despite their theoretical advantages, hedonic housing price indexes are not so commonly computed by statistical agencies or real estate professionals. Many published indexes still rely on mean or median prices, or favor repeat-sales methods, which require less information about the attributes of the housing units and less econometric expertise on the part of the index compilers, but may be less accurate and robust. In France as in other countries where housing sales have to be recorded in front of a notary, data on transaction prices and characteristics of dwellings are available. Such data have been centralized since 1994, and quarterly hedonic housing price indexes have been computed for more than 10 years. This paper describes the institutional setting of housing transactions in France, and the collaboration between the notaries and the national statistical agency (INSEE). The former are responsible for data collection and regular computation, whereas the latter takes scientific responsibility for the method. The detailed information on the individual properties transacted remains proprietary data, but disaggregated indexes are publicly and freely available. This organization and assignment of roles has proven effective and might be extended to countries with similar institutional settings.     

Testing the efficiency of the Norwegian housing market

The question of whether or not the housing market is efficient is posed by an increasing number of economists, policymakers, homebuyers, and homesellers. This article tests the efficiency hypothesis on data from the housing market in Oslo over the period 1991–2002, employing the Case–Shiller time-structure test on a repeat-sales house price index and returns to housing. We demonstrate that both the repeat-sales house price index and returns contain time structure and that the housing market is characterized by inefficiencies. We also find, surprisingly, that the housing market consistently yields higher appreciation at lower volatility than the stock market over the period.     

Carpooling and driver responses to fuel price changes: Evidence from traffic flows in Los Angeles

We examine carpooling and driver responses to fuel price changes. Using a simple theoretical model, we show that traffic flows in mainline lanes unambiguously decrease when fuel prices increase, and this effect is stronger when the presence of a carpool lane provides a substitute to driving alone. In contrast, in carpool (HOV) lanes flow can either increase or decrease. These predictions are tested using 8 years of traffic flow data for 1700 locations in Los Angeles. In our preferred specification, the mean elasticity of flow with respect to fuel price is 0.136 for HOV lanes. For a 10% increase in fuel price this implies 10 additional carpools per hour, $8.8 million per year in additional congestion costs for carpoolers and $11.3 million lower costs for mainline drivers. For mainline lanes, flow elasticities are −0.083 and −0.050 for highways with and without an HOV lane. These estimates imply that the mean highway with an HOV lane experiences a 30% larger decrease in hourly flow compared to the mean highway without an HOV lane. Flows in HOV lanes show an immediate decrease following a price increase but respond positively to price increases over time, which suggests time is an important input to carpool formation.     

How long do housing cycles last? A duration analysis for 19 OECD countries

This paper analyzes the duration of house price upturns and downturns in the last 40 years for 19 OECD countries. Both upturns and downturns display duration dependence: they are more likely to end as their duration increases. Downturns display also lagged duration dependence: they are less likely to end if the previous upturn was particularly long. These patterns are consistent with a boom-bust view of housing price dynamics, where booms represent departures from fundamentals that are increasingly difficult to sustain and busts serve as readjustment periods. Findings are robust to the inclusion of macroeconomic variables, which allow for the estimation of additional determinants of house price expansions and contractions.     

Convenient links for the estimation of hedonic price indexes: the case of unique,infrequently traded assets

Hedonic methods are a prominent approach in the construction of quality‐adjusted price indexes. This paper shows that the process of computing such indexes is substantially simplified if arithmetic (geometric) price indexes are computed based on exponential (log‐linear) hedonic functions estimated by the Poisson pseudo‐maximum likelihood (ordinary least squares) method. A Monte Carlo simulation study based on housing data illustrates the convenience of the links identified and the very attractive properties of the Poisson estimator in the hedonic framework.     

The Amsterdam rent index: The housing market and the economy, 1550–1850

The paper investigates the long run historic development of the Amsterdam rental housing market (1550–1850). Using rent data on a large cross section of residential properties in Amsterdam we are able to develop an annual constant-quality rent index for the entire time period. Whereas nominal rents nearly tripled over the considered sample period, average Amsterdam house rents, in real terms, had approximately the same level in 1850 as they exhibited in 1550. Otherwise stated, nominal rents and goods prices rose at the same pace. Over these 301 years, the real index moves between a minimum level of 45.6 and a maximum of 162.4. As concerns the relation between the housing market and the real economy, we find empirical evidence that fluctuations in rents and fluctuations in proxies of business cycle activity comove, both in nominal and in real terms.     

A dymimic model of housing price determination

This paper presents and estimates a model of the resale housing market. The data are a cross-section of monthly time series obtained from the multiple-listing service for a suburb of San Diego. The model is specified and estimated as a dynamic multiple indicator multiple cause system of equations where the capitalization rate is taken to be an unobservable time series to be estimated jointly with the unknown parameters. These are estimated by maximum likelihood using an EM algorithm based upon Kalman filtering and smoothing.The specification of the model features hedonic equations for each house sale and a dynamic equation for the capitalization rate which is constrained to make the expectation of prices equal the present value of the net returns to home ownership whenever the economic variables stabilize at steady state values. Out of steady state, the capitalization rate slowly adapts to new information.The model attributes a large portion of housing price increases of the 1970's to a fall in the capitalization rate which in turn was driven by rental inflation, tax rates and mortgage rates. Post-sample simulations indicate an initial flattening of housing inflation rates and later a fall brought on by the increase in steady state capitalization rates. In-sample simulations show that although both Proposition 13 and the inflation induced rise in the marginal income tax rates provided partial explanations for the fall in capitalization rates, the single most important factor was the acceleration in price of housing services which interacted with the tax treatment of home ownership to produce an amazing 18% average annual rate of price increase over the last seven years of the 1970's.     

Financial incentives to postpone retirement and further effects on employment — Evidence from a natural experiment

This paper examines the effect of the introduction of permanent benefit reductions for early retirees (i) on the duration until benefit claiming and (ii) on the duration until exit from gainful employment. I estimate discrete time duration models using different error term specifications. Administrative data containing the full earnings history of the individuals are used. Since the reform implementing the benefit reductions was a natural experiment, under some assumptions a causal effect can be identified. The permanent reduction of retirement benefit amounts causes a postponement of claiming benefits by about 14 months and a delay of employment exit by about 10 months on average.     

Depreciation, Maintenance, and Housing Prices

This paper investigates the effect of homeowner maintenance and improvements on the depreciation rate for housing and on house price indexes. We examine three specifications of a hedonic house price model: one that includes a variable for age, as a proxy for depreciation, and an age–maintenance interaction variable; one that considers depreciation but ignores maintenance; and one that ignores both depreciation and maintenance. The remarks of the listing agent as to the property's condition is our proxy for the level of maintenance characterizing the home. In our sample, we find that poorly maintained homes depreciate at a much faster rate than do homes with average maintenance, and that well-maintained homes depreciate somewhat more slowly. Omitting maintenance from the variable specification has little impact on hedonic house price indexes constructed with our data, but failing to consider dwelling age imparts a significant and growing downward bias to the indexes. Monte Carlo simulations investigating various data specifications support our empirical findings.     

Intraurban variation in the price of housing

Theoretical models of spatial consumer behavior assume the existence of a housing price surface that increases with accessibility. It is often hypothesized that inadequate accessibility measures are responsible for the failure of most empirical studies to support this premise. A general accessibility measure consisting of a double power series in cartesian coordinates is developed and shown to represent a general formulation of traditional accessibility measures. This formulation is incorporated in a hedonic price regression model, and the model is estimated using census tract data for the city of Milwaukee. The hedonic prices are then used to construct intraurban housing price indexes. The results of this study provide strong support for the existence of the presumed price surface. A comparison of this new hedonic price model with traditional models suggests that the double power series formulation is a superior representation of accessibility.     

城市住房价格指数编制方法的拓展设计及实证检验

科学监测城市房价走势,在当前环境下尤为重要。为拓展国际通行方法编制国内单一城市房价指数的适用性,引入样本匹配重复交易法构建房价指数,以提高样本容量与可比性。基于上海数据的实证结果表明,相较于传统重复交易法和特征价格法,样本匹配重复交易法能更准确地反映住房价格变动,结果异常波动性更小,噪声影响程度更低,在克服样本代表性误差和变量缺失误差方面效果更显著,对编制国内城市房价指数具有较好应用价值。     

HEDONIC PRICE INDEXES FOR RESIDENTIAL HOUSING: A SURVEY,EVALUATION AND TAXONOMY

Every house is different. It is important that house price indexes take account of these quality differences. Hedonic methods which express house prices as a function of a vector of characteristics (such as number of bedrooms and bathrooms, land area and location) are particularly useful for this purpose. I consider here some developments in the hedonic methodology, as it is applied in a housing context, that have occurred in the last three decades. A number of hedonic house price indexes are now available. However, it is often difficult to see how these indexes relate to each other. For this reason I attempt to impose some structure on the literature by developing a taxonomy of hedonic indexes, and then show how existing indexes fit into this taxonomy. Also discussed are some promising areas for future research in the hedonic field. In particular, greater use needs to be made of spatial econometric and nonparametric methods to exploit the increased availability of geospatial data. The main criticisms of the hedonic approach are evaluated and compared with those of the repeat‐sales and stratified median methods. The overall conclusion is that the advantages of the hedonic approach outweigh its disadvantages.     

A bigger piece of the pie: The relative importance of affiliative and change-oriented citizenship and task performance in predicting overall job performance

We examine the extent to which both in-role (task performance) and extra-role dimensions of performance (organizational citizenship behaviors) account for variance in ratings of overall job performance by utilizing currently available meta-analytic estimates. Relative weight analysis results show that overall performance is determined more by three OCB forms in combination (RW = 0.34; %RW = 72.9%) than by task performance (RW = 0.12; %RW = 27.1%). Among the OCB forms, the relative weight of OCB-O (RW = 0.17; %RW = 36.9%) is greater than those of OCB-I (RW = 0.11; %RW = 0.22.9%) and OCB-CH (RW = 0.06; %RW = 13.1%). Consistent with the results from a relative weight analysis, results from a series of multiple regression analyses also show that the incremental contribution (ΔR²) of each performance dimension above and beyond the other performance dimensions is the highest for OCB-O (0.056), followed by those of task performance (0.041), OCB-CH (0.007), and OCB-I (0.003). We discuss the theoretical and practical implications of these findings along with study limitations and future research directions.     

Aging and house prices

The paper investigates how aging will affect house prices. It uses for the first time a house price dataset covering 22 advanced economies. The analysis finds that demography did and will affect real house prices significantly. The results suggest that a major shift is taking place. In the past 40 years, on average demography increased advanced economy real house prices by around 30 basis points per annum, while in the next 40 years aging will decrease them on average by around 80 basis points per annum compared to neutral demographics. The shift from demographic tailwinds to headwinds might also be relevant when thinking about financial asset prices.     

Project financing,entrepreneurial activity,and investment in the presence of asymmetric information

We analyze a two-period signaling model in which a representative entrepreneur in a regional economy has a project that generates a random cash flow and that requires investment that the entrepreneur raises from a competitive market. The project's type is known to the entrepreneur but not to the investors. Further, the entrepreneur is restricted to issuing debt only or equity only. We first show that there is no separating perfect Bayesian equilibrium (PBE) contract involving the issuance of equity only, that there exists a pooling PBE contract involving the issuance of equity only, and that a debt contract is preferred to an equity contract by our entrepreneur. Next, we suppose that the entrepreneur incurs a non-pecuniary cost of financial distress F > 0 whenever he is unable to make a repayment at time t = 1. We provide conditions on F under which a pooling PBE contract with debt exists and a separating PBE contract with debt and equity exists. Finally, we examine whether a high type entrepreneur will prefer a setting with a cost of financial distress (F > 0) or a setting in which there is no such cost (F = 0).     

Strategic behavior across gender: A comparison of female and male expert chess players

This paper aims to measure differences in risk behavior among expert chess players. The study employs a panel data set on international chess with 1.4 million games recorded over a period of 11 years. The structure of the data set allows us to use individual fixed-effect estimations to control for aspects such as innate ability as well as other characteristics of the players. Most notably, the data contains an objective measure of individual playing strength, the so-called Elo rating. In line with previous research, we find that women are more risk-averse than men. A novel finding is that men choose more aggressive strategies when playing against female opponents even though such strategies reduce their winning probability.     

The effect of widowhood on housing and location choices

The number of elderly persons living alone is increasing and their influence on the housing market is getting larger. This paper investigates the effect of the loss of a spouse on housing and location choices. A partner’s death induces a decrease in income which may lead to downsizing. Widowhood may also reveal new preferences, such as the need to be close to care givers and health services. We estimate the effect of a transition to widowhood on housing consumption and location choices using the French Housing Surveys. Widowhood significantly increases residential mobility, especially at older ages and for those who have children. Mobile widows tend to live closer to their relatives but do not move to co-reside with a child. Housing and location adjustments are consistent with new widows moving to dwellings that are smaller, more often apartments and in the rental sector, and on average located in larger municipalities where services are more accessible. The housing demand of widows will be significant in the next 20 years, especially the demand for small dwellings.     

Task and person-focused leadership behaviors and team performance: A meta-analysis

This paper reports the results of a meta-analytic review of the relationship between person and task-focused leader behaviors, on the one hand, and team performance, on the other hand. The results, based on 89 independent samples, show a moderate positive (ρ = 0.33) association between both types of leadership behaviors and subjective team performance. For objective team performance, the effect sizes are smaller, yet positive (ρ = 0.19 for task-focused leadership behaviors and ρ = 0.18 for person-focused leadership behaviors). Furthermore, with respect to the methodological moderators, the analyses show that the relationships were stronger when leadership behaviors were rated by the leaders themselves, rather than by others, and the association was stronger when the correlations were estimated at the individual level, as opposed to the team level of analysis. Concerning conceptual moderators, team type was identified as a significant moderator, and correlations between a person-focused leadership behavior and team performance were stronger for service and project teams than for action/performing teams. Task interdependence was another moderator tested in our meta-analysis, yet our results show no clear moderating effect of task interdependence on the relationship between leadership behavior and team performance.     

The Impact of Manufactured Housing on Adjacent Residential Property Values: A GIS Approach Based on Three North Carolina Counties

This empirical study examines the impact of manufactured housing (MH) on the values of adjacent site-built residential properties using Geographical Information Systems (GIS) and large data samples for three counties in North Carolina, USA, for the period of 1994-2000. Both property appreciation rates (AR) and property values (PV) are examined with respect to proximity to MH. While ARs are based on a simple measure of value appreciation, PVs are estimated in a linear regression based hedonic price model, which is designed to captures the contributions of structure and location attributes to property values. Results indicate that the appreciation rates slightly decreased with distance from a MH unit in Buncombe and Wake, but the reverse is true in Pitt. The statistical analyses reveal that proximity to a manufactured home influences the value of nearby site-built residential property. Estimated property values show that the further away from a manufactured home, the higher the site-built property value, other things being equal.