Housing cycles and gentrification

Daniel Murphy

Journal of Monetary Economics, 2024, vol. 144, issue C

Abstract: The analysis in this paper documents a high-frequency link between housing markets and downtown gentrification since the mid-1990s. Specifically, property values and the share of formally educated residents increase more in downtown locations than in suburbs during MSA-wide housing market expansions. This relationship holds conditional on changes in MSA-level high-end incomes and is evident at short (three-year) and longer time horizons. I propose a mechanism to account for this evidence based on stronger pass-through from housing market expansions to housing costs for low-income (less formally educated) households. This evidence has implications for the effects of macroeconomic stabilization policies on inequality.

Keywords: Gentrification; Housing cycles (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:144:y:2024:i:c:s0304393224000035

DOI: 10.1016/j.jmoneco.2024.01.003

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