The price responsiveness of housing supply in OECD countries

Caldera, Aida; Johansson, Åsa

doi:10.1016/j.jhe.2013.05.002

Cited by 145 publications

(110 citation statements)

References 32 publications

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“…This may be explained, at least partially, by the relatively strict Finnish land use regulations. Our estimates are in line with recent findings of Caldera and Johansson (2013), according to which the supply elasticity generally is below one in European countries, while it is substantially greater in the U.S. 6 The Oulu model does not include the interest rate, as the model is not invertible if the interest rate is present. That is, for Oulu H 2 0 : α p1 , α c1 = 0.…”

Section: Supply Elasticity Estimatessupporting

confidence: 89%

“…Malpezzi and Mayo (1997) report lower supply elasticities for the countries with a higher degree of government intervention / regulation, and Caldera and Johansson (2013) find supply elasticities to be generally greater in the more densely populated countries and in countries with longer waiting time to get building permits.…”

Section: Determinants and Implications Of Supply Elasticity Variationmentioning

confidence: 95%

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Regional variation in the elasticity of supply of housing, and its determinants: The case of a small sparsely populated country

Oikarinen

Peltola

Valtonen

2015

Regional Science and Urban Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in ABSTRACTPrevious empirical investigations provide evidence of substantial regional variation in the supply elasticity of housing, and show that the elasticity and its variation across cities within the U.S. are significantly influenced by regulatory supply constraints, city level population, population density, and geographic constraints. This paper studies empirically if these findings apply to a country that is notably different from the U.S. with respect to its population density, typical city size, geographic and cultural coherence, and regulatory constraints, i.e., Finland. Based on data for the period 1987-2011, our findings are largely in line with those reported for the U.S. The results support the theoretical models indicating that the supply elasticity is largely a local phenomenon, i.e., dependent mainly on city specific factors rather than the abundance of undeveloped land at the country level. The long-term supply elasticity substantially varies across Finnish cities. The city size, zoning policies, and geographic constraints are found to be the most important factors causing regional elasticity differences, accounting for some 80% of the elasticity variation.JEL Classification: R31, R52

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Section: Supply Elasticity Estimatessupporting

confidence: 89%

Section: Determinants and Implications Of Supply Elasticity Variationmentioning

confidence: 95%

Regional variation in the elasticity of supply of housing, and its determinants: The case of a small sparsely populated country

Oikarinen

Peltola

Valtonen

2015

Regional Science and Urban Economics

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“…This contributed to increasing housing demand in these countries, although the reverse is also true, as many immigrants worked in the construction sector. The responsiveness of housing supply to demand varies widely across euro area countries as a result of differences in geographical and urban characteristics, as well as land use and planning regulations (Caldera and Johansson, 2013).…”

Section: Introductionmentioning

confidence: 99%

Comovement in Euro area housing prices: A fractional cointegration approach

2014

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This paper analyses comovement in housing prices across the euro area. We use techniques based on the concepts of fractional integration and cointegration. Our results indicate that all the individual log-real price indices display orders of integration which are above one, implying long memory in their corresponding growth rates. Further, looking at the cointegration relationships, we observe that the series for the euro area is cointegrated with those of Belgium, Germany and France. Focussing on the individual countries, we find cointegration relationships between Belgium and Spain, Belgium and the Netherlands, Germany and Spain, Germany and Ireland, France and Spain and Ireland and the Netherlands. Other bilateral cointegration relationships can either clearly be rejected or the results are ambiguous. Finally, prices in Germany seem to move in the opposite direction from other countries, which may be related to capital flows associated with current account imbalances.

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“…The lack of international evidence on regulation is particularly unfortunate because the US appears to be on one end of the spectrum in regards to the elasticity of housing supply. Caldera and Johansson (2013) estimate this elasticity for each of 21 OECD countries using a two-equation error correction model, and find that the U.S. has the most elastic supply. It also has the lowest average time required to obtain a building permit among these 21 countries.…”

Section: Discussionmentioning

confidence: 99%

Regulation and Housing Supply

Gyourko

Molloy

2014

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A wide array of local government regulations influences the amount, location, and shape of residential development. In this chapter, we review the literature on the causes and effects of this type of regulation. We begin with a discussion of how researchers measure regulation empirically, which highlights the variety of methods that are used to constrain development. Many theories have been developed to explain why regulation arises, including the role of homeowners in the local political process, the influence of historical density, and the fiscal and exclusionary motives for zoning. As for the effects of regulation, most studies have found substantial effects on the housing market. In particular, regulation appears to raise house prices, reduce construction, reduce the elasticity of housing supply, and alter urban form. Other research has found that regulation influences local labor markets and household sorting across communities. Finally, we discuss the welfare implications of regulation. Although some specific rules clearly mitigate negative externalities, the benefits of more general forms of regulation are very difficult to quantify. On balance, a few recent studies suggest that the overall efficiency losses from binding constraints on residential development could be quite large.

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The price responsiveness of housing supply in OECD countries

Cited by 145 publications

References 32 publications

Regional variation in the elasticity of supply of housing, and its determinants: The case of a small sparsely populated country

Regional variation in the elasticity of supply of housing, and its determinants: The case of a small sparsely populated country

Comovement in Euro area housing prices: A fractional cointegration approach

Regulation and Housing Supply

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