Clustered housing cycles

Hernandez-Murillo, Ruben and Owyang, Michael T. and Rubio, Margarita (2017) Clustered housing cycles. Regional Science and Urban Economics, 66 . pp. 185-197. ISSN 0166-0462

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Abstract

Using a panel of U.S. city-level building permits data, we estimate a Markov-switching model of housing cycles that allows cities to systematically deviate from the national housing cycle. These deviations occur for clusters of cities that experience simultaneous housing contractions. We find that cities do not form housing regions in the traditional geographic sense. Instead, similarities in factors affecting the demand for housing (such as population growth or availability of credit) appear to be more important determinants of cyclical co-movements than similarities in factors affecting the supply for land (such as the availability of developable land or the elasticity of land supply).

Item Type: Article
Keywords: Clustered Markov switching, business cycles, building permits, co-movements
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > School of Economics
Identification Number: 10.1016/j.regsciurbeco.2017.06.003
Depositing User: Rubio, Margarita
Date Deposited: 21 Jun 2017 08:55
Last Modified: 13 Oct 2017 00:07
URI: http://eprints.nottingham.ac.uk/id/eprint/43653

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