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The dynamics of house price responsiveness and locational sorting: Evidence from air quality changes

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  • Lang, Corey

Abstract

Despite extensive use of housing data to reveal valuation of non-market goods, the process of house price adjustment remains vague. Using the restricted access American Housing Survey, a high-frequency panel of prices, turnover, and occupant characteristics, this paper examines the time path of prices and preference-based sorting in response to air quality changes caused by differential regulatory pressure from the 1990 Clean Air Act Amendments. The results suggest that owner-occupied units capitalize changes quickly, whereas rent prices lag behind amenity levels. The delayed but sharp rent response temporally coincides with evidence of sorting, indicating a strong link between location choices and price dynamics.

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  • Lang, Corey, 2015. "The dynamics of house price responsiveness and locational sorting: Evidence from air quality changes," Regional Science and Urban Economics, Elsevier, vol. 52(C), pages 71-82.
    • Handle: RePEc:eee:regeco:v:52:y:2015:i:c:p:71-82
    DOI: 10.1016/j.regsciurbeco.2015.02.005
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    More about this item

    Keywords

    Hedonic valuation; Price dynamics; Capitalization; Sorting; Air quality;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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