Satellite-based measures of buildout and the effect of constrained housing supply on regional labour markets

Ryan Greenaway-McGrevy and Kade Sorensen

No 4, Working Papers from University of Auckland, Economic Policy Center (EPC)

Abstract: We examine the impact of housing supply restrictiveness on regional adjustment to labour market shocks in New Zealand. To do so, we develop a measure of city-level housing supply restrictiveness that combines a novel satellite-based measure of suburban buildout with extant estimates of implicit regulation costs and geographic constraints on land. We incorporate the new measure of housing supply restrictiveness into an empirical model of regional adjustment that describes metropolitan labour and housing market outcomes. Our results show that after a positive labour market shock, regions with relatively restrictive housing supply experience lower employment and population growth; less housing construction; and greater increases in rents compared to regions with responsive housing supply.

Keywords: Regional Adjustment; Housing Supply; Buildout; Satellite Imagery; Labour Markets (search for similar items in EconPapers)
JEL-codes: C33 J61 R23 R30 (search for similar items in EconPapers)
Date: 2020-08
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