Working Paper: NBER ID: w4332
Authors: Richard K. Green; Patric H. Hendershott
Abstract: Real house prices are directly determined by the willingness of households to pay for (and willingness of builders to supply) a constant-quality house. Changes in the quantity of housing demanded will affect real prices only to the extent that the long-run housing supply schedule is positively sloped. In this paper we use 1980 census data to measure the impact of the age structure and real income per household on the willingness of households to pay for a constant quality house. Extrapolating these variables forward to 2010, we conclude that evolving demographic forces are likely to raise real house prices. not lower them.
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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 |
|---|---|
| demographic factors (J11) | housing demand (R21) |
| housing demand (R21) | real house prices (R31) |
| demographic factors (J11) | real house prices (R31) |
| real income per household (D19) | housing demand (R21) |
| age structure (J11) | housing demand (R21) |