Housing demand, regional house prices and consumption

This paper provides a new explanation for regional variation in the 2000-2012 housing and consumption boom and bust. Cities with a greater share of growing industries experienced larger housing demand shocks, larger house price increases from 2001-2006 and greater price declines from 2006-2011. Consistent with theory, price effects were stronger in housing-supply inelastic cities. City-level differences in housing demand are also correlated with supply elasticity. Controlling for industry, I estimate a durables consumption-house price elasticity of 0.08 from 2001-2006, 60% smaller than estimates without the controls. Post- 2006, the estimated elasticity is 0.19 and housing prices rather than local conditions explain consumption changes.

Department dc:contributor.department

Sloan School of Management.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2018

Author dc:creator

• Liebersohn, Carl J

Advisor dc:contributor.advisor

• Jonathan A. Parker.

• Sloan School of Management.

Statement dc:rights

• MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/118008

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/118008