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Border Effects in House Prices
Author(s) -
Micheli Martin,
Rouwendal Jan,
Dekkers Jasper
Publication year - 2018
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.12255
Subject(s) - german , economics , real estate , house price , border effect , estimation , estate , economy , econometrics , international economics , geography , finance , management , archaeology
This article estimates the effect of the Dutch–German border on house prices. We argue that the difference between house prices at the border indicates the willingness to pay to stay in a country compared to living across the border. After a change in the tax rules in 2001, migration from the Netherlands to Germany increased substantially and the gradient of Dutch house price towards the German border steepened. Combining a German and Dutch real estate dataset and using different estimation strategies, we find that asking prices of comparable housing drop by about 16% when one crosses the Dutch–German border.