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

Daniel Levy () and Avichai Snir ()
Additional contact information
Avichai Snir: Department of Banking and Finance, Netanya Academic College, Netanya 42365, ISRAEL

Working Papers from International School of Economics at TSU, Tbilisi, Republic of Georgia

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)
Pages: 77 pages
Date: 2018
References: Add references at CitEc
Citations:

Published

Downloads: (external link)
http://iset.tsu.ge/files/wp_01_18_Levy_and_Snir_-_Here_Lives_a_Wealthy_Man.pdf (application/pdf)

Related works:
Working Paper: Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets (2018)
Working Paper: Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets (2018)
Working Paper: Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets (2018)
Working Paper: Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets (2018)
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:tbs:wpaper:18-001

Access Statistics for this paper

More papers in Working Papers from International School of Economics at TSU, Tbilisi, Republic of Georgia Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).