Template-Type: ReDIF-Paper 1.0
Author-Name: Thissen, M.J.P.M.
Author-Name-Last: Thissen
Author-Name-First: Mark
Author-Name: Burger, M.J.
Author-Name-Last: Burger
Author-Name-First: Martijn
Author-Person: pbu126
Author-Name: van Oort, F.G.
Author-Name-Last: van Oort
Author-Name-First: Frank
Author-Person: poo11
Title: House Prices, Bubbles and City Size
Abstract: We build a theoretical model that relates house price, city size and the expected future growth of demand for housing. Our model combines the Alonso-Mills model on urban economics with insights from financial economics on house prices. Estimating the model for cities in the US, we empirically validate the positive effect of city size on urban house prices. Moreover, our estimations confirm that an (unrealistic) increase in the expected growth of demand fuelled by the widespread availability of credit provides a better explanation for the recent bubble than inelastic housing supply that explained earlier bubbles.
Creation-Date: 2010-07-15
File-URL: https://repub.eur.nl/pub/20380/ERS-2010-030-ORG.pdf
File-Format: application/pdf
Series: RePEc:ems:eureri
Number: ERS-2010-030-ORG
Classification-JEL: M, M13, O32
Keywords: bubbles, city size, house prices
Handle: RePEc:ems:eureri:20380