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Acnowledging for spatial effects in the Portuguese housing markets

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  • G. Carvalho, Pedro
  • Ribeiro, Alexandra

Abstract

The aim of this paper is to revisit a former paper on the Portuguese housing market (1995), acknowledging for spatial effects in order to interpret housing market changes over 1995-2001. The paper will include a first section devoted to explain the differences between the OLS regression analysis and spatial econometrics, explaining the theoretical background used to develop a spatial lag model with the same database; the second section will show the misspecification problems we found when we ran the same model for after 1995-1998 databases; the third section is devoted to describe new housing literature findings relating housing market evolution with the macroeconomic cycles in Portugal; as a consequence the fourth section will include the method we developed with recent census data, to explain the evolution of the country macroeconomic cycles and the agents’ new behavioural attitudes concerning housing; finally and using spatial analysis we can understand the main changes occurred over the 1995-2001 period. The evaluation of the results contradicts some mainstream scholar and political knowledge to explain spatial inequalities between coast and interior municipalities. Complexity issues seem to be present when we consider the way different market agents make decisions on housing markets, looking this good either as a place to live or an alternative investment asset. In the concluding remarks we raise some new interesting questions for further research.

Suggested Citation

  • G. Carvalho, Pedro & Ribeiro, Alexandra, 2007. "Acnowledging for spatial effects in the Portuguese housing markets," MPRA Paper 6132, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:6132
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    File URL: https://mpra.ub.uni-muenchen.de/6132/1/MPRA_paper_6132.pdf
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    References listed on IDEAS

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    1. Goodman, Allen C., 2005. "Central cities and housing supply: Growth and decline in US cities," Journal of Housing Economics, Elsevier, vol. 14(4), pages 315-335, December.
    2. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, December.
    3. James M. Poterba, 1984. "Tax Subsidies to Owner-Occupied Housing: An Asset-Market Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 99(4), pages 729-752.
    4. Bruce, Donald & Holtz-Eakin, Douglas, 1999. "Fundamental Tax Reform and Residential Housing," Journal of Housing Economics, Elsevier, vol. 8(4), pages 249-271, December.
    5. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, vol. 79(1), pages 125-137, March.
    6. Mankiw, N. Gregory & Weil, David N., 1989. "The baby boom, the baby bust, and the housing market," Regional Science and Urban Economics, Elsevier, vol. 19(2), pages 235-258, May.
    7. Lastrapes, William D., 2002. "The Real Price of Housing and Money Supply Shocks: Time Series Evidence and Theoretical Simulations," Journal of Housing Economics, Elsevier, vol. 11(1), pages 40-74, March.
    8. Pedro Guedes Carvalho, 2003. "Housing Demand in Portugal," Econometrics 0303005, University Library of Munich, Germany.
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    More about this item

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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