The Impact of Supply Constraints on House Prices in England
Bibliographic Data
| ID | 9714910 |
|---|---|
| Authors | Christian A L Hilber (0000-0002-1352-495X, London School of Economics & Centre for Economic Performance & Spatial Economics Research Centre), Wouter Vermeulen (CPB Netherlands Bureau for Economic Policy Analysis & VU University & Spatial Economics Research Centre) |
| Year | 2016 |
| Volume | 126 |
| Issue | 591 |
| Pages | 358-405 |
| Publication date | 2016-03-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/ecoj.12213 |
| OpenAlex | W2273081624 |
| Language | EN |
| Citations received | 90 |
| References cited | 38 |
i) This discussion paper, originally published September 2012, is a completely revised version from April 2014. We model the impact of local supply constraints on local house prices in a setting in which households with idiosyncratic tastes sort endogenously over heterogeneous locations. We test the theoretical prediction that house prices respond more strongly to changes in local earnings in places with tight supply constraints using a unique panel dataset of 353 local planning authorities in England ranging from 1974 to 2008. Exploiting exogenous variation from a policy reform, vote shares and historical density to identify the endogenous constraints-measures, we find that: i) Regulatory constraints have a substantive positive impact on the house price-earnings elasticity; ii) The effect of constraints due to scarcity of developable land is largely confined to highly urbanised areas; iii) Uneven topography has a quantitatively less meaningful impact; iv) The effects of supply constraints are greater during boom than bust periods; and v) Our findings are robust to using a labour demand shock measure as demand shifter
Aggregate demand · Aggregate supply · Boom · Bust · Demand shock · Earnings · Econometrics · Economic shortage · Economics · Geography · House price · Local planning · Microeconomics · Monetary economics · Price elasticity of demand · Price elasticity of supply · Scarcity · Shock (circulatory · Supply and demand · Supply shock · Finance · Financial Literacy, Pension, Retirement Analysis · Housing Market and Economics · Housing, Finance, and Neoliberalism
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| Unique citing works | 90 |
|---|---|
| Citations per year | 7,5 |
| Citation span | 2014 - 2026 (13) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 89 |