Derivatives Markets for Home Prices

28 Pages Posted: 28 Mar 2008 Last revised: 29 Apr 2008

See all articles by Robert J. Shiller

Robert J. Shiller

Yale University - Cowles Foundation; National Bureau of Economic Research (NBER); Yale University - International Center for Finance

Multiple version iconThere are 2 versions of this paper

Date Written: March 2008

Abstract

The establishment recently of risk management vehicles for home prices is described. The potential value of such vehicles, once they become established, is seen in consideration of the inefficiency of the market for single family homes. Institutional changes that might derive from the establishment of these new markets are described. An important reason for these beginnings of real estate derivative markets is the advance in home price index construction methods, notably the repeat sales method, that have appeared over the last twenty years. Psychological barriers to the full success of such markets are discussed.

Keywords: Home price index, Housing futures, Real estate futures, Real estate derivatives, Home equity insurance, Repeat sales indices, Hedging demand

JEL Classification: R31, G13

Suggested Citation

Shiller, Robert J., Derivatives Markets for Home Prices (March 2008). Cowles Foundation Discussion Paper No. 1648; Yale Economics Department Working Paper No. 46. Available at SSRN: https://ssrn.com/abstract=1114102 or http://dx.doi.org/10.2139/ssrn.1114102

Robert J. Shiller (Contact Author)

Yale University - Cowles Foundation ( email )

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HOME PAGE: http://www.econ.yale.edu/~shiller/

National Bureau of Economic Research (NBER) ( email )

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Yale University - International Center for Finance ( email )

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203-432-6167 (Fax)

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