The impact of employment on housing prices: Detailed evidence from FDI in Ireland
Kerri Agnew and
Ronan C. Lyons
Regional Science and Urban Economics, 2018, vol. 70, issue C, 174-189
Access to employment is one of the most valuable amenities offered by cities. In urban economics, this is the principal driver of the bid-rent gradient and is a key determinant of housing prices and land values. However, little is known about the causal effect of employment on housing prices, due to the problem of identification. This study presents the first causal estimates of employment changes on housing prices, both sales and rental. It does this by using a purpose-built spatially granular dataset of 1.4 million housing prices and FDI employment, covering Ireland 2007–2013. Identification rests on a combination of rich spatio-temporal variation due to the abundance of FDI in Ireland, a rich set of location controls and an inelastic housing supply in the period covered. The main results show that 1–2 years after 1000 extra jobs have been created, monthly rents in nearby properties will be between 0.5% and 1% higher. The effect on prices is at least 2% but less consistent across specifications. On average, net job creation in export-oriented FDI firms 2009–2013 added roughly €48 million to the stock of wealth of owner occupied real estate and €8 million to the stock of wealth of the rental sector. We also estimate that the aggregate effect of the stock of FDI jobs in 2013 on Irish housing prices is €440 million, or just over 1%.
Keywords: Housing prices; Employment; Foreign direct investment; Ireland; Hedonic regression (search for similar items in EconPapers)
JEL-codes: R10 R21 F23 (search for similar items in EconPapers)
References: Add references at CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: The Impact of Employment on Housing Prices: Detailed Evidence from FDI in Ireland (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:70:y:2018:i:c:p:174-189
Access Statistics for this article
Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou
More articles in Regional Science and Urban Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().