The Causal Relationship between House Prices and Economic Growth in the Nine Provinces of South Africa: Evidence from Panel-Granger Causality Tests
Tsangyao Chang (),
Beatrice Desiree Simo-Kengne and
Rangan Gupta ()
No 201317, Working Papers from University of Pretoria, Department of Economics
This paper analyses the causal relationship between housing activity and growth in nine provinces of South Africa for the period 1995-2011, using panel causality analysis, which accounts for cross-section dependency and heterogeneity across provinces. Our empirical results support unidirectional causality running from housing activity to economic growth for most of the provinces studied; bi-directional causality between housing activity and economic growth for Gauteng; and no causality in any direction between housing activity to economic growth in Eastern Cape and KwaZulu-Natal. Our findings provide important insights for housing policies and strategies for South Africa. Specifically, housing sector might be an efficient growth-led instrument for all the provinces except Eastern Cape and KwaZulu-Natal.
Keywords: House Prices; Economic Growth; Dependency and Heterogeneity; Panel Causality Test (search for similar items in EconPapers)
JEL-codes: C33 R11 R12 R31 (search for similar items in EconPapers)
Pages: 18 pages
New Economics Papers: this item is included in nep-afr, nep-fdg and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:pre:wpaper:201317
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