Spatial and Temporal Diffusion of Housing Prices in the Presence of a Linguistic Border: Evidence from Belgium

Helgers, Roel; Buyst, Erik

doi:10.1080/17421772.2016.1102961

Cited by 17 publications

(12 citation statements)

References 20 publications

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“…This effect can be regarded as a special case of price diffusion since: 1) The diffusion area not only includes nearby regions, but also further areas; and 2) The diffusion direction is one-way, which means that a shock starting in one center spreads to other regions and there are no feedback effects. In empirical applications on house markets (e.g., Holly et al 2011, Helgers andBuyst 2016), a large city and major financial center, usually with the highest prices, is considered the dominant region to drive price development in all other regions. To confirm that a county is a dominant region, the following pairs of equations are estimated for all other − 1 counties:…”

Section: Methodsmentioning

confidence: 99%

The Spatial and Temporal Diffusion of Agricultural Land Prices

2019

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In the last decade, many parts of the world experienced severe increases in agricultural land prices. This price surge, however, did not take place evenly in space and time. To better understand the spatial and temporal behavior of land prices, we employ a price diffusion model that combines features of market integration models and spatial econometric models. An application of this model to farmland prices in Germany shows that prices on a county-level are cointegrated. Apart from convergence towards a long-run equilibrium, we find that price transmission also proceeds through short-term adjustments caused by neighboring regions.

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Section: Methodsmentioning

confidence: 99%

The Spatial and Temporal Diffusion of Agricultural Land Prices

2019

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“…( 2012 ) investigated the spatial interrelationships between house prices and concluded on a ripple effect potentially existing from the east and west coast metropolitan areas to the rest of the USA. Helgers and Buyst ( 2016 ), who investigated the case of Belgium, also found that house price shocks are more likely to spread from Antwerp to other parts of the country. Comparable results were found in China by Gong et al.…”

Section: Overview Of the Literaturementioning

confidence: 97%

Risks and interrelationships of subdistrict house prices: the case of Amsterdam

Teye

Haan

Elsinga

2017

J Hous and the Built Environ

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This paper uses individual house transaction data from 1995 to 2014 in Amsterdam to explore the risks and interrelationships of the subdistrict house prices. Simple indicators suggest that house prices grow faster and are more risky in the central business district and its immediate surrounding areas than in the peripherals. Furthermore, we observe an over time decreasing intervariations between the subdistrict house price growth rates, whereas we find a lead-lag and house price causal flow from the more central to the peripheral subdistricts.

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“…Note that the error correction term ECT i;tÀ1 incorporates the spatial dimension in the long-run relationship through the neighbouring prices. To examine whether a predetermined barrier, such as a border, affects the diffusion of prices, we follow Helgers and Buyst (2016) by splitting neighbouring prices into two groups. One group is the weighted price consisting of regions on the same side of the border, " p same 2016, we refrain from including a dominant region in the model since a dominant region is less likely to exist in agricultural land markets (Yang, Odening, and Ritter 2019).…”

Section: A Land Price Diffusion Model With a Border Effectmentioning

confidence: 99%

“…Equation 3allows the incorporation of common factors that might influence the development of land prices across the study region. We follow Helgers and Buyst (2016) and add the change in real GDP growth for the same time period as a possible explanatory variable for the price development at county-level within the entire study region. Since we do not expect the price change in a county to influence the real GDP growth, we consider this variable exogenous.…”

Section: Datamentioning

confidence: 99%

“…Using a sequential testing procedure allows Yang, Ritter, and Odening (2017) to identify several distinct convergence clusters. The closest study to ours investigates the impact of a language border on spatiotemporal price diffusion of house prices in Belgium (Helgers and Buyst 2016). Starting with a pairwise approach to provide insight into the degree of integration among housing prices, the study estimates a bivariate VAR model with error-correcting coefficients.…”

Section: Introductionmentioning

confidence: 99%

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On the role of domestic and international financial cyclical factors in driving economic growth

et al. 2019

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Land market regulations are often justified by the assumption that activities of foreign and nonagricultural investors drive up prices in domestic land markets. However, empirical knowledge about the dynamics of agricultural land prices across borders is sparse. Using the German reunification as a natural experiment, we study the effect of the former inner German border on the dynamics of agricultural land prices in East and West Germany. We apply a land price diffusion model with an error correction specification to analyse spatial agricultural land markets. A novel feature of our model is its ability to distinguish price diffusion within states and across state borders. We provide evidence for a persistent border effect given that the fraction of spatially integrated counties is larger within states than across the former border. Moreover, we observe non-significant error correction terms for many counties along the former border. From a policy perspective, it is striking to realize that even 25 years after German reunification, pronounced land price differences persist. It is quite likely that price diffusion through existing borders within the EU would take even more time given language barriers, different institutional frameworks, and information asymmetries between domestic and foreign market participants.

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Spatial and Temporal Diffusion of Housing Prices in the Presence of a Linguistic Border: Evidence from Belgium

Cited by 17 publications

References 20 publications

The Spatial and Temporal Diffusion of Agricultural Land Prices

The Spatial and Temporal Diffusion of Agricultural Land Prices

Risks and interrelationships of subdistrict house prices: the case of Amsterdam

On the role of domestic and international financial cyclical factors in driving economic growth

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