Agglomeration Effects and Liquidity Gradients in Local Rental Housing Markets

Daniel Ruf ()

No 1702, Working Papers on Finance from University of St. Gallen, School of Finance

Abstract: This paper empirically analyzes the relation between local liquidity in rental housing markets and urban agglomeration effects. Using listed rent offers from online market platforms, I study the cross-sectional variation of rental market liquidity. Local liquidity is negatively related to the distance to nearby located urban agglomeration centers, manifesting in a decreasing liquidity gradient. I show that agglomeration externalities expose local rental markets to a systematic liquidity risk. Furthermore, more thinly traded rental markets offer lower capitalization rates for investors.

Keywords: Urban Agglomeration Effects; Liquidity; Rental Housing Market (search for similar items in EconPapers)
JEL-codes: G12 R31 R40 (search for similar items in EconPapers)
Pages: 68 pages
Date: 2017-02
New Economics Papers: this item is included in nep-geo and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:usg:sfwpfi:2017:02

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