An Investigation into the Spatial Distribution of British Housing Market Activity

David Paul Gray ()
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David Paul Gray: Department of Accountancy Finance and Economics, University of Lincoln, Lincoln LN6 7TS, UK

JRFM, 2024, vol. 17, issue 1, 1-16

Abstract: This paper sets out to consider how a simple and easy-to-estimate power-law exponent can be used by policymakers to assess changes in economic inequalities, where the data can have a long tail—common in analyses of economic disparities—yet does not necessarily deviate from log-normality. The paper finds that the time paths of the coefficient of variation and the exponents from Lavalette’s function convey similar inferences about inequalities when analysing the value of house purchases over the period 2001–2022 for England and Wales. The house price distribution ‘steepens’ in the central period, mostly covering the post-financial-crisis era. The distribution of districts’ expenditure on house purchases ‘steepens’ more quickly. This, in part, is related to the loose monetary policy associated with QE driving a wedge between London and the rest of the nation. As prices can rise whilst transactions decline, it may be better for policymakers to focus on the value of house purchases rather than house prices when seeking markers of changes in housing market activity.

Keywords: housing market transactions; house prices; England and Wales; Lavalette’s law; convergence and divergence (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2024
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