Government Policy and House Prices in the United Kingdom: An Econometric Analysis

A spatio-temporal model of house prices in the USA

“…In particular, p t = ln(P t ) will be cointegrated with y t = ln(Y t ) with the cointegrating vector given by (1, −1), if y t is an integrated variable of order 1. For example, if θ t and g t are 2 Feldstein et al (1978), Hendershott and Hu (1981) and Buckley and Ermisch (1982). 3 Alternatively, expectations can be taken under the risk-neutral measure which does not necessarily require households to be individually risk neutral, although it does imply that at the aggregate households are treated as if they are risk neutral.…”

A behavioral model of house prices

“…However, there is no well-developed theory connecting house prices to income, demographic factors, nominal interest rates and capital market innovations. Despite this, income per capita or income per household remains one of the principal driving variables in the short as well as the long run in almost all models of house prices (Buckley and Ermisch, 1982;Meen, 1990Meen, , 2002International Monetary Fund, 2004;OECD, 2005a;Gallin, 2006;Girouard et al, 2006). Thus far it has not been established theoretically why home prices should be positively related to income and, particularly, why the income elasticity of house prices is often close to one in empirical estimates that are, typically, calculated over relatively short periods.…”

House prices and long-term equilibrium in the regulated market of the Netherlands

“…Rent-to-price and price-to-income ratios are widely used as the proxy of equilibrium (Buckley & Ermisch, 1982;Muth, 1988;Capozza & Seguin, 1996;Cho, 1996;Gallin, 2008;Davis, Lehnert & Martin, 2008). Like the dividend-price ratio initiated for the stock market, the rent-to-price ratio is grounded in asset-pricing theory.…”