Preface xi
CHAPTER 1 1
1. INTRODUCTION 1
1 .1 Introduction
1 .2 The Scope of the Book 2
1.2.1 Data and Definitions 2
1.2.2 Economic Theory and Housing
1.2.3 Empirical Analysis 6
1.2.4 Housing Policy 7
CHAPTER2 9
2. ISSUES IN HOUSING DATA ANALYSIS 9
2.1 Introduction 9
2.2 Time-Series Properties of International House
Prices, Construction and Transactions 10
2.3 The Sub-National (Regional) Level 21
2.3.1 Regional Prices 22
2.3.2 New Construction 28
2.4 Metropolitan House Prices 30
2.5 Measurement Errors and Biases 33
CHAPTER 3 41
3. SELECTED TOPICS IN HOUSING THEORY:
A NATIONAL PERSPECTIVE 41
3.1 Introduction 41
3.2 The Determination of House Prices 42
3.3 Credit Rationing and Downpayment Constraints 50
3.3.1 Downpayment Constraints 52
3.3.2 Credit Constraints and the Conduct of Monetary Policy 57
3.4 Lags in prices 59
3.5 Joint Models of House Prices and Property Transactions . 64
3.6 Joint Models of Prices and Construction (Stock/Flow Models) 67
3.7 General Equilibrium Models . 70
3.8 Concluding Remarks 76
CHAPTER 4 77
4. HOUSING THEORY: REGIONAL ISSUES 77
4.1 Introduction 77
4.2 Regional House Price Models 78
4.3 Econometric Issues 81
4.3.1 Modelling Spatial Dependence 82
4.3.2 Spatial Coefficient Heterogeneity in Static Models 83
4.3.3 Econometric Issues in Dynamic Heterogeneous Panels . 84
4.3.4 Aggregation Across Households . 90
4.4 Convergence and Divergence in Regional Housing Markets 92
4.4.1 Migration 92
4.4.2 Transactions and Search Costs 95
4.4.3 Equity Transfer 97
4.4.4 Spatial Arbitrage 98
4.4.5 Leads/Lags and Convergence in the Determinants of House Prices 98
4.4.6 Coefficient Heterogeneity 99
4.5 So Why Do Regional Price Patterns Differ? 102
CHAPTER 5 103
5. HOUSING CAREERS AND URBAN STRUCTURE 103
5. I Introduction 1 03
5.2 Some Aspects of Location Theory and Its Extensions 105
5.3 Unemployment in London 110
5.4 Urban/Suburban Drift 112
5.5 Individual Housing Careers 113
5.5. I New Household Formation 114
5.5.2 Moving Propensities 118
5.5.3 Location Choice 122
CHAPTER 6 125
6. EMPIRICAL FINDINGS FROM NATIONAL HOUSING MODELS 125
6.1 Introduction 125
6.2 House Price Models 126
6.3 Stock-Flow Models of Prices and Construction 138
6.4 House Prices and Transactions 147
6.5 Full Models of Housing and the Economy 156
CHAPTER 7 159
7. EXPLAINING REGIONAL PATTERNS 159
7.1 Introduction 159
7.2 What Does the Literature Say? 160
7.3 Convergence and Divergence 163
7.4 Spatial Coefficient Heterogeneity and the Ripple Effect 164
7.5 Debt Gearing and Regional Price Changes 172
7.6 Spatial Interactions in the USA and Australia 174
CHAPTER 8 177
8. HOUSING, DEPRIVATION AND URBAN CHANGE 177
8.1 Introduction 177
8.2 Moving and Location in London and South East England 178
8.3 Unemployment- Location or Skills? 183
8.4 Housing and Industrial Location 188
8.5 Commuting Behaviour 194
8.6 Conclusions 196
CHAPTER 9 199
9. SELECTED ISSUES IN NATIONAL HOUSING POLICY 199
9.1 Introduction 199
9.2 Housing, Consumers' Expenditure and Financial
Liberalisation 200
9.3 Downpayments, Monetary Policy and Cycles 203
9.3 .1 Downpayments and Volatility 203
9.3.2 Monetary Policy, Planning and Housing Cycles 209
9.4 Housing and Monetary Union 212
9.5 Planning for Household Growth 213
CHAPTER 10 219
10. SELECTED ISSUES IN REGIONAL AND URBAN HOUSING POLICY .. 219
10.1 Introduction : 219
10.2 Regional Evolutions 220
10.3 Relative Prices, Planning and Policy 222
10.4 Urban Population Dynamics 224
10.5 Urban Structure 227
10.5.1 Housing Careers and the Neighbourhood 228
10.5.2 Tenure Structure 228
10.5.3 Work Patterns and the Distribution of Employment 229
10.6 Is Population Loss from Cities Inevitable? . 229
10.7 Housing and Low-Income Households 232
10.8 Cumulative Growth and Decline- Some Conclusions 232
CHAPTER 11 235
11.AND FINALLY 235
REFERENCES 237
INDEX 255