Domino Effects within a Housing Market: The Transmission of House Price Changes Across Quality Tiers
Lok-Sang Ng Ho
Lingnan College - Department of Economics
affiliation not provided to SSRN
Donald R. Haurin
Ohio State University (OSU) - Department of Economics
August 7, 2008
Journal of Real Estate Finance and Economics, Vol. 37, No. 4, 2008
We argue that shocks to a housing market are transmitted through the hierarchy of quality tiers within a housing market. The result is the prediction of waves of house price changes accompanied by changes in transaction volume. Our study is related to existing models of spatial ripple effects across housing markets. The data are from the Hong Kong housing market. The findings from Granger causality tests strongly support the argument that ripple or domino effects within a single housing market occur in response to external shocks.
Keywords: housing, homeownership, ripple effect, down-payment, price dynamics, equity effects, public housing, privatization
JEL Classification: E32, H30, R21, R31Accepted Paper Series
Date posted: August 8, 2008
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