Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273882 
Year of Publication: 
2022
Series/Report no.: 
MAGKS Joint Discussion Paper Series in Economics No. 44-2022
Publisher: 
Philipps-University Marburg, School of Business and Economics, Marburg
Abstract: 
This paper provides an analysis of the convergence pattern of German housing prices and rents employing a new dataset that covers all the country's administrative districts. In addition to conventional tests for β-convergence and δ-convergence, we apply Phillips and Sul's (2007) approach so as to allow for the various heterogeneity and transitional dynamics across districts. Our results reveal no evidence of convergence across Germany or within states; rather, we discover widespread evidence of divergence, as well as evidence of inter-state convergence and support for the existence of convergence clubs. At the federal level, we identify club numbers ranging from 11 (for existing flat prices) to 5 (for new flat rents). At the state level, the estimated number of clubs is generally lower, ranging from 0 to 6.
Subjects: 
Convergence
Germany
Housing prices
district-level data
convergence clubs
JEL: 
R10
R30
R31
Document Type: 
Working Paper

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