The Impact of Supply Constraints on House Prices in England | Zendy

Hilber Christian A. L. | Zendy; Vermeulen Wouter | Zendy

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The Impact of Supply Constraints on House Prices in England

Author(s) -

Hilber Christian A. L.,

Vermeulen Wouter

Publication year - 2016

Publication title -

the economic journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 4.683

H-Index - 160

eISSN - 1468-0297

pISSN - 0013-0133

DOI - 10.1111/ecoj.12213

Subject(s) - schools of economic thought , regional science , library science , new england , economics , political science , public administration , sociology , law , computer science , neoclassical economics , politics

We test the theoretical prediction that house prices respond more strongly to changes in local earnings in places with tight supply constraints using a unique panel dataset of 353 Local Planning Authorities in England between 1974 and 2008. Exploiting exogenous variation from a policy reform, vote shares and historical density to identify the endogenous constraints‐measures, we find that: regulatory constraints have a substantive positive impact on the house price‐earnings elasticity; the effect of constraints due to scarcity of developable land is largely confined to highly urbanised areas; and uneven topography has a quantitatively less meaningful impact.

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