Work

Mean Reversion in Housing Markets

Year: 2014

Type: dissertation

Abstract: Booms in house prices are usually followed by busts. This pattern is called "mean reversion." Mean reversion in housing markets has historically coincided with economic recessions across the world. Chapter 1 establishes mean reversion in U.S. data, and attempts to explain it using the dynamics of wages in cities. Chapter 2 takes a different approach. It models mean reversion resulting from speculation and uncertainty. This model explains why strong mean reversion in prices occurs in cities where it is easy to build houses, a phenomenon that Chapter 1 cannot explain. Chapter 3 takes the spirit of Chapter 2 and applies it to the optimal design of the income tax.

Source: Digital Access to Scholarship at Harvard (DASH) (Harvard University)

Author: Charles Nathanson

Language: English

Topic: Housing Market and Economics

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Sustainable cities and communities

Open Access status: green

Funders: National Science Foundation, Alfred P. Sloan Foundation, University of Chicago

OpenAlex ID: W2129208308

Cites: 116

Cited by:

Related to: 10