Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/148365
Authors: 
Lerbs, Oliver
Teske, Markus
Year of Publication: 
2016
Series/Report no.: 
ZEW Discussion Papers 16-082
Abstract: 
Individual sales prices and local vacancy rates in the housing market pose a natural analogy to the wage curve, a popular concept in labor economics that describes how individual wages decrease with higher local unemployment. While housing search and matching models and housing externalities strongly suggest a stable inverse relationship, there is still a lack of convincing empirical research on the sensitivity of house sales to local vacancy variation. Based on more than 10,000 single-family home transactions from the German market, this paper confirms a robust house price-vacancy curve among individual home prices and adjacent residential vacancies. The economic size of the relationship is highly comparable across all four analyzed states: a doubling of the vacancy rate at the municipality level is associated with a 5-8% discount in quality-controlled selling prices. Despite negative price signals, local vacancy distributions tend to persist over long time horizons, leaving room for policy intervention.
Subjects: 
House prices
Housing vacancy
Hedonic regression
Wage curve
JEL: 
R23
R31
R58
Document Type: 
Working Paper

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