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The causal relationship between house prices and growth in the nine provinces of South Africa: evidence from panel - Granger causality tests

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  • Tsangyao Chang
  • Beatrice D. Simo-Kengne
  • Rangan Gupta

Abstract

This paper analyses the causal relationship between housing activity and growth in nine provinces of South Africa for the period 1995-2011, using panel causality analysis, which accounts for cross-section dependency and heterogeneity across provinces. Our empirical results support unidirectional causality running from housing activity to economic growth for most of the provinces studied; bi-directional causality between housing activity and economic growth for Gauteng; and no causality in any direction between housing activity to economic growth in Eastern Cape and KwaZulu-Natal. Our findings provide important insights for housing policies and strategies for South Africa. Specifically, housing sector might be an efficient growth-led instrument for all the provinces except Eastern Cape and KwaZulu-Natal.

Suggested Citation

  • Tsangyao Chang & Beatrice D. Simo-Kengne & Rangan Gupta, 2014. "The causal relationship between house prices and growth in the nine provinces of South Africa: evidence from panel - Granger causality tests," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 6(4), pages 345-358.
    • Handle: RePEc:ids:ijsuse:v:6:y:2014:i:4:p:345-358
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    Citations

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    Cited by:

    1. Ibrahim N Ouattara, 2020. "A bootstrap panel granger causality analysis of the relationships between financial sector development and globalization in sub-saharan african countries," Economics Bulletin, AccessEcon, vol. 40(4), pages 3153-3166.
    2. Olufemi Adewale Aluko Adefemi A. Obalade, 2020. "Import-economic growth nexus in selected African countries: An application of the Toda-Yamamoto Granger non-causality test," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 23(2), pages 117-128, November.
    3. Yii, Kwang-Jing & Tan, Chai-Thing & Ho, Wing-Ken & Kwan, Xiao-Hui & Nerissa, Feng-Ting Shim & Tan, Yan-Yi & Wong, Kar-Horn, 2022. "Land availability and housing price in China: Empirical evidence from nonlinear autoregressive distributed lag (NARDL)," Land Use Policy, Elsevier, vol. 113(C).
    4. Furkan Emirmahmutoglu & Mehmet Balcilar & Nicholas Apergis & Beatrice D. Simo-Kengne & Tsangyao Chang & Rangan Gupta, 2014. "Causal relationship between asset prices and output in the US: Evidence from state-level panel Granger causality test," Working Papers 201411, University of Pretoria, Department of Economics.

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