Economic impacts of the housing market: a panel data approach
نویسندگان
چکیده
Usually housing is viewed in the context of consumption resulting from other economic drivers such as income and employment. Here, we study how two key local economic measures, the gross metropolitan product (GMP) and unemployment rate, respond to shocks in home value appreciation, home sales, and new construction, respectively. Our analysis relies upon a large panel of 158 metropolitan statistical areas (MSAs) in the United States from 1983 to 2002. Location-related MSA characteristics and time-specific macro economic variables are both controlled. We find a statistically significant impact of home appreciation and home sales on these economic measures with home appreciation having a stronger impact than home sales. However, the magnitude of the impact of housing shocks is modest, at least when we compare it to the impact of a shock in the population growth rate. JEL classification: E23, E24, E32, R11
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