Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/203516
Authors: 
Mankart, Jochen
Ludwig, Alexander
Wiederholt, Mirko
Quintana, Jorge
Vellekoop, Nathanael
Year of Publication: 
2019
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2019: 30 Jahre Mauerfall - Demokratie und Marktwirtschaft - Session: Macroeconomics - Heterogeneous Agents No. F16-V1
Abstract: 
What is the role of heterogenous house-price expectations for boom-bust cycles in the housing market? We exploit a unique Dutch panel data set on households' house price expectations and their consumption, savings and housing choices for the period 2003-2016. This period was characterized by a pronounced boom-bust cycle in the housing market. Conditioning the sample on household heads who report non-zero house price expectations, we find that expectations closely track realized house prices. We next develop a structural life-cycle model of the Dutch housing market where we distinguish household types according to their house price expectations. We employ a calibrated model variant to test if observed variations in expectations can account for the housing boom-bust cycle. First results show that our model closely matches the observed fluctuations of the rent-to-price ratio in the data but overshoots the size of the housing boom.
Subjects: 
Housing
survey expectations
house price cycles
life-cycle model
JEL: 
D14
D84
D31
E21
E30
G21
R21
Document Type: 
Conference Paper

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