IDEAS home Printed from https://ideas.repec.org/p/inh/wpaper/2024-1.html
   My bibliography  Save this paper

Housing Policy Uncertainty in Korea and Its Effects on Housing Markets

Author

Listed:
  • Hyunduk Suh

    (Inha University)

  • So Jung Hwang

    (Inha University)

Abstract

We estimate housing policy uncertainty (HPU) in Korea, employing the economic policy uncertainty (EPU) method by Baker et al. (2016). The uncertainty index is measured by the frequency of texts in Korean newspapers that imply housing policy uncertainty during 1997-2022. The HPU index has been high in Moo-hyun Roh's and Myung-bak Lee's administrations and has risen again since 2020. Also, HPU tends to increase during large housing market policy announcements, political instability, and administrative regime changes. We also analyze the effect of HPU on housing markets by estimating a vector autoregressive (VAR) model. The VAR results suggest that a rise in HPU negatively affects housing prices and residential constructions but increases housing price volatility. Meanwhile, a positive shock in the housing prices endogenously raises HPU, which suggests that uncertainty was typically more significant in policies that aim to stabilize the housing market overheating.

Suggested Citation

  • Hyunduk Suh & So Jung Hwang, 2024. "Housing Policy Uncertainty in Korea and Its Effects on Housing Markets," Inha University IBER Working Paper Series 2024-1, Inha University, Institute of Business and Economic Research.
    • Handle: RePEc:inh:wpaper:2024-1
    as

    Download full text from publisher

    File URL: https://drive.google.com/file/d/19pmmf9_2rA-FpBwZI2yyPy80qG5iHmEL/view?usp=drive_link
    File Function: First version, 2024
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    housing policy; uncertainty; EPU; HPU; VAR;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inh:wpaper:2024-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Youngjin Yun (email available below). General contact details of provider: https://edirc.repec.org/data/deinhkr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.