House Prices, Local Demand, and Retail Prices
Bibliographic Data
| ID | 10173281 |
|---|---|
| Authors | Johannes Stroebel (0000-0002-3926-2353, National Bureau of Economic Research), Joseph Vavra (National Bureau of Economic Research) |
| Year | 2018 |
| Volume | 127 |
| Issue | 3 |
| Pages | 1391-1436 |
| Publication date | 2018-10-30 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/701422 |
| OpenAlex | W3123112464 |
| Language | EN |
| Citations received | 20 |
| References cited | 32 |
We document a causal response of local retail prices to changes in local house prices, with elasticities of 15–20 percent across housing cycles. These price responses are largest in zip codes with many homeowners and are driven by changes in markups rather than local costs. We argue that markups rise with house prices because greater housing wealth reduces homeowners' demand elasticity, and firms raise markups in response. Shopping data confirm that house price changes affect the price sensitivity of homeowners, but not that of renters. Our evidence suggests a new source of business cycle markup variation
Economics · House price · Labour economics · Microeconomics · Monetary economics · Price elasticity of demand · Price elasticity of supply · Financial Literacy, Pension, Retirement Analysis · Housing Market and Economics · Spatial and Panel Data Analysis
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| Unique citing works | 20 |
|---|---|
| Citations per year | 2,5 |
| Citation span | 2018 - 2026 (9) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 20 |