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Title:Explaining regional variation in equilibrium real estate prices and income PDF Logo
Authors:Bischoff, Oliver
Issue Date:2010
Series/Report no.:Hamburg contemporary economic discussions 36
Abstract:We combine the real estate model of Potepan (1996) with the spatial equilibrium approach of Roback (1982) to prove the interdependency of housing prices, rental prices, building land prices and income via one simultaneous equilibrium analysis. Using unique cross-sectional data on the majority of German counties and cities for 2005, we estimate the equations in their structural and reduced form. The results show significantly positive interaction effects of income and real estate prices. Moreover, we can confirm model predictions concerning the majority of exogenous determinants. In particular, expectations about population development seem to be among the most important determinants of price and income disparities between regions in the long term.
Subjects:Regional Housing Markets
Spatial Equilibrium Analysis
Simultaneous Equation
Germany
JEL:C2
C31
R11
R13
R21
R31
ISBN:978-3-940369-87-1
Document Type:Working Paper
Appears in Collections:Hamburg Contemporary Economic Discussions, Lehrstuhl für Wirtschaftspolitik, Universität Hamburg

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