We provide explicit solutions to life-cycle utility maximization problems involving dynamic decisions on investments in stocks and bonds, consumption of perishable goods, and the rental and the ownership of residential real estate. House prices, stock prices, interest rates, and the labor income of the decision-maker follow correlated stochastic processes. The explicit consumption and investmen...

*The views expressed here are those of the author and do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System. or most homeowners, housing is the single most important component of their nonpension wealth. Therefore, a change in house prices greatly affects the total wealth of many households. Furthermore, movements in house prices can af...

This bulletin is based on research conducted by Professor Garry Barrett, Dr Kadir Atalay and Dr Rebecca Edwards at the AHURI Research Centre—The University of Sydney. The research explored the nature and magnitude of the relationship between house prices, household debt and the labour market decisions of Australian households. What impact do house prices have on household debt and labour supply...

We investigate the effect of hurricane strikes on housing prices in US coastal cities. To this end, we construct a new index of hurricane destruction which varies over time and space. Using this index and an annual, two equation, dynamic equilibrium correction panel model with area and time fixed effects, we model the effects of hurricanes on real house prices and real incomes. In our model hur...

Is the cross-sectional distribution of house prices close to a (log)normal distribution, as is often assumed in empirical studies on house price indexes? How does the distribution evolve over time? To address these questions, we investigate the cross-sectional distribution of house prices in the Greater Tokyo Area. We find that house prices (Pi) are distributed with much fatter tails than a log...