publication . Report . 2016

Real Options Effect of Uncertainty and Labor Demand Shocks on the Housing Market

Lee, Gabriel; Nguyen Thanh, Binh; Strobel, Johannes;
English
  • Published: 16 Dec 2016
  • Country: Germany
Abstract
This paper shows that uncertainty affects the housing market in two significant ways. First, uncertainty shocks adversely affect housing prices but not the quantities that are traded. Controlling for a broad set of variables in fixed-effects regressions, we find that uncertainty shocks reduce housing prices and median sales prices in the amount of 1.4% and 1.8%, respectively, but the effect is not statistically significant for the percentage changes of all homes sold. Second, when both uncertainty and local demand shocks are introduced, the effects of uncertainty on the housing market dominate that of local labor demand shocks on housing prices, median sell pric...
Subjects
free text keywords: 330 Wirtschaft, ddc:330
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