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Convergence in European Real Estate Markets: Theoretical Perspectives and Empirical Evidence

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  • Patrick McAllister

Abstract

This paper examines the concept and investigates the evidence of convergence in European real estate investment markets. The fact that the term ëconvergenceí has been described as suffering from ìmeaning-overloadî has meant that outside the real estate literature its characteristics and causes have generated a substantial debate (Quah, 1996, p.1). Since conceptual foundations shape empirical investigation, clarity in definition and denotation is important. Hence the paper examines a number of facets of convergence. Particular attention is paid the concepts of b-convergence and s-convergence, their implications for patterns of growth and co-movement and the well-developed methodological critique of convergence empirics. Given the manifest relevance of national and regional economic growth to real estate performance, empirical research on regional economic convergence within the EU is critically reviewed. Given the linkages of real estate investment markets to wider capital markets, empirical research on capital market integration within the EU is also considered. Whilst acknowledging the limitations of real estate data for many EU markets, a number convergence tests are applied to the available data.

Suggested Citation

  • Patrick McAllister, 2001. "Convergence in European Real Estate Markets: Theoretical Perspectives and Empirical Evidence," ERES eres2001_225, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2001_225
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    References listed on IDEAS

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    1. Fatas, Antonio, 1997. "EMU: Countries or regions? Lessons from the EMS experience," European Economic Review, Elsevier, vol. 41(3-5), pages 743-751, April.
    2. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May.
    3. Quah, D., 1990. "Galton'S Fallacy And The Tests Of The Convergence Hypothesis," Working papers 552, Massachusetts Institute of Technology (MIT), Department of Economics.
    4. Damien Neven & Claudine Gouymte, 1995. "Regional Convergence in the European Community," Journal of Common Market Studies, Wiley Blackwell, vol. 33(1), pages 47-65, March.
    5. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
    6. Danny Quah, 1996. "Convergence as Distribution Dynamics (with or without Growth)," CEP Discussion Papers dp0317, Centre for Economic Performance, LSE.
    7. Button, Kenneth J & Pentecost, Eric J, 1995. "Testing for Convergence of the EU Regional Economies," Economic Inquiry, Western Economic Association International, vol. 33(4), pages 664-671, October.
    8. Boyle, G E & McCarthy, T G, 1997. "A Simple Measure of Beta-Convergence," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(2), pages 257-264, May.
    9. Bernard, Andrew B & Durlauf, Steven N, 1995. "Convergence in International Output," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 97-108, April-Jun.
    10. Jan Fagerberg & Bart Verspagen, 1996. "Heading for Divergence? Regional Growth in Europe Reconsidered," Journal of Common Market Studies, Wiley Blackwell, vol. 34(3), pages 431-448, September.
    11. Frankel, Jeffrey A. & Rose, Andrew K., 1997. "Is EMU more justifiable ex post than ex ante?," European Economic Review, Elsevier, vol. 41(3-5), pages 753-760, April.
    12. Sala-i-Martin, Xavier, 1994. "Cross-sectional regressions and the empirics of economic growth," European Economic Review, Elsevier, vol. 38(3-4), pages 739-747, April.
    13. Friedman, Milton, 1992. "Do Old Fallacies Ever Die?," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 2129-2132, December.
    14. Quah, Danny, 1996. "Convergence as distribution dynamics (with or without growth)," LSE Research Online Documents on Economics 2254, London School of Economics and Political Science, LSE Library.
    15. repec:bla:scandj:v:95:y:1993:i:4:p:427-43 is not listed on IDEAS
    16. Cannon, Edmund S & Duck, Nigel W, 2000. "Galton's Fallacy and Economic Convergence," Oxford Economic Papers, Oxford University Press, vol. 52(2), pages 415-419, April.
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    Cited by:

    1. Jean-François Carpantier & Christelle Sapata, 2020. "The Ups and Downs of European Real Estate Markets’ Integration," Finance, Presses universitaires de Grenoble, vol. 41(2), pages 109-139.
    2. Alessandra Canepa & Emilio Zanetti Chini & Huthaifa Alqaralleh, 2022. "Global Cities and Local Challenges: Booms and Busts in the London Real Estate Market," The Journal of Real Estate Finance and Economics, Springer, vol. 64(1), pages 1-29, January.

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    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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