Working Paper: CEPR ID: DP15409
Authors: Nir Jaimovich; Stephen Terry; Nicolas Vincent
Abstract: Exploiting data on tens of millions of housing transactions, we show that (1) house prices grew by less in manufacturing-heavy US regions and (2) that this pattern is especially present for the lowest-value homes. Counterfactual accounting exercises reveal that regional diāµerences in the growth of these lowest-value homes more than fully account for an observed increase in overall house price inequality. We conclude that the relative economic decline of manufacturing- heavy areas extends far beyond income and employment flows to include shifts in important local asset prices, a pattern which matters for total house price inequality.
Keywords: manufacturing; decline; house prices; housing inequality
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Manufacturing exposure (L69) | Lower house price growth (R31) |
| Higher share of manufacturing employment in 2000 (L69) | Slower house price growth from 2001 to 2006 (N13) |
| Manufacturing exposure (L69) | Increase in overall house price inequality (G59) |
| Regional differences in growth of lowest-value homes (R11) | Increase in overall house price inequality (G59) |