Winners and Losers of House Price Booms and Busts

Hamish Low and Sánchez-Marcos, Virginia
Authors registered in the RePEc Author Service: Virginia Sanchez-Marcos

No 17127, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Fluctuations in house price generate substantial heterogeneity in the price of purchase of similar dwellings depending on the time of purchase. These differences in the price of purchase have large effects on life-time consumption and on income-net-of- housing-costs. We document these effects using the large house price fluctuations during the recent housing boom-bust in Spain. Households can mitigate these impacts through changing labor supply which we estimate using an IV strategy. Men work more in response to higher house prices, whereas the correlation of house prices and labor supply for women is driven by selection: households where women work more, buy more expensive houses.

Keywords: House price fluctuations; Labor supply; Mortgage costs (search for similar items in EconPapers)
JEL-codes: D31 E32 J22 (search for similar items in EconPapers)
Date: 2022-03
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