Population aging and housing prices: who are we calling old?

Ye Jin Heo
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Ye Jin Heo: Graduate Institute of International and Development Studies

No 288, NBP Working Papers from Narodowy Bank Polski

Abstract: This paper empirically studies through which channel - between short expected remaining life and withdrawal from the labor market - population aging affects real house price more and how the effect can vary if old-age population is defined alternatively in a way to reflect different aspects of aging, using a panel data of OECD countries. It finds that the main driver of a negative relationship between aging and real house price comes from the later stage of life and not immediately after the age of 65 or retirement. It also shows that the effective retirement age matters more in explaining the relationship between aging and real house price than the age 65, since the share of retired population has a nonlinear effect on real house price, while the standard old-age population aged over 65 does not. When I project future real house price, the standard old-age population only predicts a further decrease in real house price as aging continues, whereas the retired population captures a positive marginal effect and leaves room for policy intervention.

Keywords: J11; G12; R21 (search for similar items in EconPapers)
JEL-codes: G12 J11 R21 (search for similar items in EconPapers)
Pages: 51
Date: 2018
New Economics Papers: this item is included in nep-age, nep-dem, nep-knm and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpmis:288

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