The Impact of Supply Constraints on House Prices in England
IEB Working Paper N. 2013/028
52 Pages Posted: 16 Oct 2013
There are 2 versions of this paper
The Impact of Supply Constraints on House Prices in England
The Impact of Supply Constraints on House Prices in England
Date Written: September 18, 2013
Abstract
We explore the impact of different types of supply constraints on house prices in England by exploiting a unique panel dataset of 353 local planning authorities ranging from 1974 to 2008. Using exogenous variation from a policy reform, vote shares and historical density to identify the endogenous constraints-measures, we find that: i) Regulatory constraints have a substantive positive impact on the house price-earnings elasticity; ii) The effect of constraints due to scarcity of developable land is largely confined to highly urbanised areas; iii) Uneven topography has a quantitatively less meaningful impact; and iv) The effects of supply constraints are greater during boom than bust periods.
Keywords: house prices, housing supply, supply constraints, land use regulation
JEL Classification: G12, R11, R21, R31, R52
Suggested Citation: Suggested Citation