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Location, location, location: manufacturing and house price growth


Jaimovich, Nir; Terry, Stephen; Vincent, Nicolas (2020). Location, location, location: manufacturing and house price growth. Discussion Paper Series DP15409, Centre for Economic Policy Research.

Abstract

Exploiting data on tens of millions of housing transactions, we show that (1) house prices grew by less in manufacturing-heavy US regions and (2) that this pattern is especially present for the lowest-value homes. Counterfactual accounting exercises reveal that regional differences in the growth of these lowest-value homes more than fully account for an observed increase in overall house price inequality. We conclude that the relative economic decline of manufacturing- heavy areas extends far beyond income and employment flows to include shifts in important local asset prices, a pattern which matters for total house price inequality.

Abstract

Exploiting data on tens of millions of housing transactions, we show that (1) house prices grew by less in manufacturing-heavy US regions and (2) that this pattern is especially present for the lowest-value homes. Counterfactual accounting exercises reveal that regional differences in the growth of these lowest-value homes more than fully account for an observed increase in overall house price inequality. We conclude that the relative economic decline of manufacturing- heavy areas extends far beyond income and employment flows to include shifts in important local asset prices, a pattern which matters for total house price inequality.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:October 2020
Deposited On:22 Jan 2021 17:08
Last Modified:22 Jan 2021 17:08
Series Name:Discussion Paper Series
Number of Pages:27
ISSN:0265-8003
OA Status:Closed
Official URL:https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15409#

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