Testing Convergence on Uk Regional House Prices: a Fractional Integration Approach
نویسنده
چکیده
A recent interest in Real Estate Market research is to investigate whether regional house prices converge in the long run. The argument is based on the idea that through migration and spatial arbitrage, shocks to the house price in one region could ̳ripple out‘ across the whole economy. If the hypothesis is accepted, relative price ratios across regions should show constancy. Although shortrun disparities may exist, the ratio should be stationary in the long run. In this paper, current literature is extended by adopting methods of fractional integration to UK regional house prices. The results, by acknowledging that the transmission of price shocks across regions could take quite a long time, provide evidence of long range dependence and find significant differences in regional house price dynamics.
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