The decision to move house and aggregate housing-market dynamics

L. Rachel Ngai and Kevin Sheedy

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Using data on house sales and inventories, this paper shows that housing-market dynamics are driven mainly by listings and less so by transaction speed, thus the decision to move house is key to understanding the housing market. The paper builds a model where moving house is essentially an investment in match quality, implying that moving depends on macroeconomic developments and housing-market conditions. The endogeneity of moving means there is a cleansing effect — those at the bottom of the match quality distribution move first — which generates overshooting in aggregate variables. The model is applied to the 1995–2004 housingmarket boom.

Keywords: housing market; search and matching; endogenous moving; match quality investment. (search for similar items in EconPapers)
JEL-codes: D83 E22 R31 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2016-06-29
New Economics Papers: this item is included in nep-dge, nep-mac and nep-ure
References: View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://eprints.lse.ac.uk/86227/ Open access version. (application/pdf)

Related works:
Journal Article: The Decision to Move House and Aggregate Housing-Market Dynamics (2020)
Working Paper: The decision to move house and aggregate housing-market dynamics (2020)
Working Paper: The Decision to Move House and Aggregate Housing-Market Dynamics (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:86227

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