The long- and short-run influences of housing prices on migration

Abstract

A change in housing prices has a profound impact on households' housing equity and future moving decisions. While most previous studies focus on discussing the mobility lock-in effect due to housing price depreciation, revealing that there is a positive relationship between housing prices and migration, this study reexamines their relationship by using the panel cointegration method and city-level panel data for Taiwan during the 1994–2016 period. The empirical results reveal that migration and housing prices are cointegrated, and the influence of housing prices on migration is significantly positive in the long run. However, the influence of housing price changes on migration is not as significant as expected in the short run. To further examine their short-run relationships, we use quantile regression and the results show that the influence of housing price changes on migration is significantly negative below the 0.5 quantile, but it turns out to be significantly positive in the 0.9 quantile. The influence of housing price changes on migration is not significant between the 0.5 and 0.8 quantiles. We conclude that the influence of housing price changes on migration might be asymmetric in the short run.