The Decision to Move House and Aggregate Housing-Market Dynamics

L. Rachel Ngai and Kevin Sheedy ()
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Kevin Sheedy: Centre for Economic Policy Research (CEP)

No 1621, Discussion Papers from Centre for Macroeconomics (CFM)

Abstract: Using data on house sales and inventories, this paper shows that housing-market dynamics are driven mainly by listings and less so by transaction speed, thus the decision to move house is key to understanding the housing market. The paper builds a model where moving house is essentially an investment in match quality, implying that moving depends on macroeconomic developments and housing-market conditions. The endogeneity of moving means there is a cleansing effect - those at the bottom of the match quality distribution move first - which generates overshooting in aggregate variables. The model is applied to the 1995{2004 housing-market boom.

Keywords: Housing market; Search and Matching; Endogenous moving; Match quality investment (search for similar items in EconPapers)
JEL-codes: D83 E22 R31 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2016-06
New Economics Papers: this item is included in nep-cse, nep-dge, nep-mac and nep-ure
References: View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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http://www.centreformacroeconomics.ac.uk/Discussio ... MDP2016-21-Paper.pdf (application/pdf)

Related works:
Journal Article: The Decision to Move House and Aggregate Housing-Market Dynamics (2020)
Working Paper: The decision to move house and aggregate housing-market dynamics (2020)
Working Paper: The decision to move house and aggregate housing-market dynamics (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:cfm:wpaper:1621

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