The causal relationship between house prices and growth in the nine provinces of South Africa: evidence from panel - Granger causality tests

Tsangyao Chang, Beatrice Desiree Simo-Kengne () and Rangan Gupta

International Journal of Sustainable Economy, 2014, vol. 6, issue 4, 345-358

Abstract: This paper analyses the causal relationship between housing activity and growth in nine provinces of South Africa for the period 1995-2011, using panel causality analysis, which accounts for cross-section dependency and heterogeneity across provinces. Our empirical results support unidirectional causality running from housing activity to economic growth for most of the provinces studied; bi-directional causality between housing activity and economic growth for Gauteng; and no causality in any direction between housing activity to economic growth in Eastern Cape and KwaZulu-Natal. Our findings provide important insights for housing policies and strategies for South Africa. Specifically, housing sector might be an efficient growth-led instrument for all the provinces except Eastern Cape and KwaZulu-Natal.

Keywords: house prices; economic growth; cross-sectional dependency; cross-sectional heterogeneity; panel causality analysis; sustainability; sustainable development; sustainable economies; South Africa; Granger causality tests; housing activity; housing policies; housing strategies; housing sector. (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijsuse:v:6:y:2014:i:4:p:345-358

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