The dynamics of house price responsiveness and locational sorting: Evidence from air quality changes

Corey Lang

Regional Science and Urban Economics, 2015, vol. 52, issue C, 71-82

Abstract: Despite extensive use of housing data to reveal valuation of non-market goods, the process of house price adjustment remains vague. Using the restricted access American Housing Survey, a high-frequency panel of prices, turnover, and occupant characteristics, this paper examines the time path of prices and preference-based sorting in response to air quality changes caused by differential regulatory pressure from the 1990 Clean Air Act Amendments. The results suggest that owner-occupied units capitalize changes quickly, whereas rent prices lag behind amenity levels. The delayed but sharp rent response temporally coincides with evidence of sorting, indicating a strong link between location choices and price dynamics.

Keywords: Hedonic valuation; Price dynamics; Capitalization; Sorting; Air quality (search for similar items in EconPapers)
JEL-codes: Q51 Q53 R23 R31 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:52:y:2015:i:c:p:71-82

DOI: 10.1016/j.regsciurbeco.2015.02.005

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