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Dynamic impacts of rising lumber prices on housing‐related prices
Author(s) -
Babula Ronald A.,
Colling Phil L.,
Gajewski Gregory R.
Publication year - 1994
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/1520-6297(199409/10)10:5<373::aid-agr2720100503>3.0.co;2-u
Subject(s) - futures contract , economics , vector autoregression , structural vector autoregression , price shock , econometrics , agricultural economics , financial economics , monetary economics , monetary policy
A monthly vector autoregression model of lumber, lumber futures, construction materials, housing, and shelter prices was shocked with a 10% lumber price increase, and dynamic responses were examined. Futures and materials price increases were immediate and endured 1 and 3 years, respectively. Housing and shelter price increases required at least 9 months to begin, and endured for about 3 years. Effects on materials, housing, and shelter prices were less than one‐for‐one. Price effects from a 10% future price increase imposed on the model were more delayed, weaker, and less enduring than those generated by lumber price shocks. ©1994 by John Wiley & Sons, Inc.