The Q theory and the Swedish housing market –an empirical test

Lennart Berg and Tommy Berger ()
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Tommy Berger: Institute for Housing and Urban Research, Postal: Box 785, SE-801 29 Gävle, Sweden

No 2005:19, Working Paper Series from Uppsala University, Department of Economics

Abstract: We argue that major changes in economic policy have resulted in a more market driven demand for housing investment in Sweden as a result of changes in policy during the end of the 1980s and beginning of the 1990s. The used investment theory is Tobin’s transparent Q theory. Our results indicate, for the last period of the sample (1993-2003 quarterly data) that a high degree of correlation between the Q ratio and the (logarithm of) two different variables for housing investment exist. An error correction regression model, controlling for structural breaks, indicates also a stable long run relationship could be detected for the logarithm of building starts and the Q ratio between 1993-2003 but not between 1981-1992.

Keywords: Tobin's Q; housing investment; error correction model; structural break (search for similar items in EconPapers)
JEL-codes: E22 R21 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2005-06-15
New Economics Papers: this item is included in nep-bec, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:uunewp:2005_019

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