Bracke, Philippe and Tenreyro, Silvana ORCID: 0000-0002-9816-7452 (2021) History dependence in the housing market. American Economic Journal: Macroeconomics, 13 (2). 420 - 443. ISSN 1945-7707
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Abstract
Using data on the universe of housing transactions in England and Wales over a 20-year period, we document that sale prices and selling propensities are affected by house prices prevailing in the period in which properties were previously bought. Using administrative data on mortgages, we show that cognitive frictions explain most of the history dependence in sale prices, whereas credit frictions are more relevant for selling propensities. We corroborate our analysis with data on online house listings, and we estimate the impact of history dependence on the collapse and slow recovery of housing market activity in the postcrisis period. (JEL E32, R21, R31)
Item Type: | Article |
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Official URL: | https://www.aeaweb.org/journals/mac |
Additional Information: | © 2021 American Economic Association |
Divisions: | Geography & Environment Spatial Economics Research Centre Economics |
Subjects: | H Social Sciences > H Social Sciences (General) H Social Sciences > HC Economic History and Conditions |
JEL classification: | E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R31 - Housing Supply and Markets |
Date Deposited: | 16 Jan 2020 15:39 |
Last Modified: | 08 Nov 2024 20:12 |
URI: | http://eprints.lse.ac.uk/id/eprint/103079 |
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