The Relationship between Land Prices and Housing Prices in Iran
Parviz Mohamadzadeh (),
Hossein Panahi () and
Seyed Ali Aleemran ()
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Parviz Mohamadzadeh: Associate Professor of Economics, University of Tabriz, Tabriz, Iran
Hossein Panahi: Associate Professor of Economics, University of Tabriz, Tabriz, Iran
Seyed Ali Aleemran: Ph.D. Student in Economics, University of Tabriz, Tabriz, Iran
Quarterly Journal of Applied Theories of Economics, 2016, vol. 3, issue 1, 89-114
The Objective of this research is to study the relationship between land price and housing prices in Iran according to the mutual causation perspective. Based on Haizhen and Allen (2013) model and using a simultaneous equations system and two-stage least squares method to study the issue between the first quarter of 1998 to the fourth quarter of 2012. The results of Toda and Yamamoto causality and Hausman test indicates that there are bilateral causality between land prices and housing prices and the results of two-stage least squares method indicate that rising land prices have increased housing prices and rising housing prices have increased land prices. It is suggested that due to the special characteristics of land such as (no depreciation and low maintenance costs), reduced the storage of land by using tax and interdiction and specific incentive policies and led to the proportional transfer in supply and demand for land by reducing unemployment and rising income and demand.
Keywords: Land price; Housing price; Toda and Yamamoto causality; Simultaneous equations (search for similar items in EconPapers)
JEL-codes: C30 G12 P25 R31 (search for similar items in EconPapers)
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