EconPapers    
Economics at your fingertips  
 

Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets

Daniel Levy () and Avichai Snir

MPRA Paper from University Library of Munich, Germany

Abstract: We use novel and unique data to study the effect of price changes in the market for luxury and middle class homes. We find that luxury home sales respond less to price changes than the middle-class home sales; in the market for luxury homes, past prices affect current prices; luxury home prices persist; and prices of luxury homes are stickier than prices of middle-class homes. Recent macroeconomic models predict that housing markets can have counter-cyclical effect, if home prices are flexible. Our findings imply that home prices, especially luxury home prices, may not be flexible enough to generate such effect.

Keywords: Housing market; luxury housing; housing demand; price rigidity; sticky prices; predictability; Veblen effect (search for similar items in EconPapers)
JEL-codes: D12 E21 E31 E32 E52 G14 R21 R31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-ure
Date: 2018-02-20
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/85264/1/MPRA_paper_85264.pdf original version (application/pdf)

Related works:
Working Paper: Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets (2018) Downloads
Working Paper: Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets (2018) Downloads
Working Paper: Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets (2018) Downloads
Working Paper: Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets (2018) Downloads
Working Paper: Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:85264

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2019-10-22
Handle: RePEc:pra:mprapa:85264