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The housing market and agricultural land dynamics: Appraising with Economic Policy Uncertainty Index

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  • Andrew Adewale Alola
  • Gizem Uzuner

Abstract

Agricultural land is a main component of the environment and ecological system. Therefore, this study employs the panel cointegration approach to investigate the dynamic relationship between the housing market vis‐à‐vis housing price (hp) and agricultural land (land) of a panel of 15 countries (countries with the gross domestic product–weighted average of the national Economic Policy Uncertainty index) over the period 1997–2015. Additionally, Granger causality approach of Dumitrescu–Hurlin is employed for the investigation. The model adjusts to the long‐run equilibrium with an annual speed of 11% from any situation of disequilibrium and with elasticities of −3.97 and −0.67, respectively, for a land and Global Economic Policy Uncertainty (gepu). Meanwhile, the impact during a short run of gepu is statistically significant and positive on hp, whereas it is not significant for land. Interestingly, the investigation reveals Granger causality from agricultural land to the housing price with feedback. The research presents an indication that policymaker(s) and urbanization stakeholders should be more concern about effective and sustainable long‐term policies. Future anomalies of food scarcity and skyrocketing house prices associated with agricultural land–house price trade‐off challenges could potentially be mitigated by such effective policy frameworks.

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  • Andrew Adewale Alola & Gizem Uzuner, 2020. "The housing market and agricultural land dynamics: Appraising with Economic Policy Uncertainty Index," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 274-285, April.
    • Handle: RePEc:wly:ijfiec:v:25:y:2020:i:2:p:274-285
    DOI: 10.1002/ijfe.1751
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    1. Demir, Ender & García-Gómez, Conrado Diego & Díez-Esteban, José María & Farinha, Jorge Bento, 2023. "How does uncertainty impact IPO activity? International evidence," Finance Research Letters, Elsevier, vol. 58(PC).
    2. Ozili, Peterson Kitakogelu, 2021. "Economic policy uncertainty: are there regional and country correlation?," MPRA Paper 105636, University Library of Munich, Germany.
    3. Tretiak, Anton & Moskalenko, Anatolii & Tretiak, Valentina & Moskalenko, Valentyna & Tretiak, Nataliia, 2022. "Agricultural land turnover in Ukraine: state, features and problems," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 8(3), September.
    4. Saffet Akdag & Ömer İskenderoglu & Andrew Adewale Alola, 2020. "The volatility spillover effects among risk appetite indexes: insight from the VIX and the rise," Letters in Spatial and Resource Sciences, Springer, vol. 13(1), pages 49-65, April.
    5. Andrew Adewale Alola, 2021. "Evidence of speculative bubbles and regime switch in real estate market and crude oil price: Insight from Saudi Arabia," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 3473-3483, July.
    6. Saffet Akdağ & İlker Kiliç & Hakan Yildirim, 2019. "Does VIX scare stocks of tourism companies?," Letters in Spatial and Resource Sciences, Springer, vol. 12(3), pages 215-232, December.
    7. Lan, Hao & Moreira, Fernando & Zhao, Sheng, 2023. "Can a house resale restriction policy curb speculation? Evidence from a quasi-natural experiment in China," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 841-859.
    8. Saud Asaad Al‐Thaqeb & Barrak Ghanim Algharabali & Khaled Tareq Alabdulghafour, 2022. "The pandemic and economic policy uncertainty," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 2784-2794, July.
    9. H. Kent Baker & Satish Kumar & Kirti Goyal & Prashant Gupta, 2023. "International journal of finance and economics: A bibliometric overview," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 9-46, January.
    10. Huang, MeiChi, 2024. "A greater crisis? Investigating MSA-level housing markets during the COVID-19 pandemic," Research in International Business and Finance, Elsevier, vol. 71(C).
    11. Tangyong Liu & Xu Gong & Lizhi Tang, 2022. "The uncertainty spillovers of China's economic policy: Evidence from time and frequency domains," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4541-4555, October.

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