User costs and bubbles in land markets

Paul Schreyer

Journal of Housing Economics, 2009, vol. 18, issue 3, 267-272

Abstract: In asset markets with speculative behavior, the long-run equilibrium relationship between asset prices and the discounted flow of future rents may become invalid. We distinguish short-term user costs and longer-term user costs with variables that reflect fundamentals. We show how to work around the empirical problem of measuring speculative expectations about asset price changes and derive a simple user cost formula where the asset price change in the short-term relationship comes out as the long-run change in the overall price level.

Keywords: Housing; bubble; User; costs; Housing; fundamentals; Speculative; behavior; Capital; theory (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:18:y:2009:i:3:p:267-272

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