House price fluctuations and residential sorting

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dc.contributor Bank of Finland Haavio, Markus Kauppi, Heikki 2014-09-22T07:58:15Z 2014-09-22T07:58:15Z 2009
dc.identifier.isbn 978-952-462-511-1
dc.identifier.issn 1456-6184
dc.description.abstract Empirical evidence suggests that local jurisdictions are internally more heterogeneous than standard sorting models predict. We develop a dynamic multiregion model, with fluctuating regional house prices, where an owner-occupying household's location choice depends on its current wealth and its current 'match' and involves both consumption and investment considerations. The relative weights of the consumption and investment motives in the location choice determine the equilibrium pattern of residential sorting, with a strong investment (consumption) motive implying sorting according to match (wealth). The model predicts a negative relation between size of house price fluctuations and residential sorting in the match dimension. Also movers should be more sorted than stayers. These predictions are consistent with evidence from US metropolitan areas when income, age and education are used as proxies for the match. Keywords: residential sorting, house prices, incomplete markets, owneroccupation, household mobility JEL classification numbers: D31, D52, R13, R21, R23
dc.format.extent 54 s.
dc.language.iso eng
dc.relation.ispartofseries Bank of Finland Research Discussion Papers
dc.subject asunnot
dc.subject hinnat
dc.subject alueet
dc.subject mallit
dc.subject kotitaloudet
dc.subject asuntomarkkinat
dc.subject USA
dc.subject SP
dc.subject RP
dc.subject asuinalueet
dc.subject mieltymykset
dc.title House price fluctuations and residential sorting
dc.type Sarjajulkaisu
dc.identifier.urn URN:NBN:fi:bof-20140807344
dc.subject.jel D31
dc.subject.jel D52
dc.subject.jel R13
dc.subject.jel R21
dc.subject.jel R23 Bank of Finland Research Discussion Papers
dc.series.year 2009
dc.series.number 14/2009
dc.series.sortingnumber 0014 5.5.2009

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