Housing Assets Research Articles

Estimating U.S. housing price network connectedness: Evidence from dynamic Elastic Net, Lasso, and ridge vector autoregressive models

This paper investigates the dynamic connectedness of random shocks to housing prices between the 50 U.S. states and the District of Columbia. The paper implements a standard vector autoregressive (VAR) model as well as three VAR models with shrinkage effects — Elastic Net, Lasso, and Ridge VAR models. The transmission of real housing return shocks on a regional basis flows from Southern states to the other three regions, whereas the Northeast receives those shocks. The West receives shocks from the South and transmits shocks to the Midwest and the Northeast. Finally, the Midwest transmits shocks to the Northeast and receives shocks from the South and the West. Our results have important implications for policymakers and investors. To the extent that the housing market affects the business cycle, the Federal Reserve can monitor housing market movements in the net transmitter states to gather information about the beginnings of the housing market cycle. Moreover, the determination of which states or regions function as the main transmitter of shocks provides information to investors on acquiring housing assets in these markets rather than the ones that are more susceptible to such shocks as net receivers.

청년희망키움통장사업 참여 청년에 대한 종단 분석을 통한 청년 자산형성지원사업의 성과

The purpose of this study is to analyze the outcomes of the South Korean asset building program for low-income young adults by tracking the multidimensional changes participants experienced in the process of building assets in the program. The study analyzed the changes of young people who participated in the asset building program comprehensively using a panel survey data conducted at four different points in 2019, 2020, 2021, and 2022 targeting 720 young people who joined the Youth Hope Savings Account Program in 2018, an asset building program for young people receiving livelihood support. As a result of analyzing a continuous response panel of 384 participants, the study found that over 70%, that is, three in four out of the participants succeeded in welfare exits of livelihood support. Additionally, improvement in employment status and stability, income, savings, living expenses, family support, housing assets, housing environment, self-esteem, and happiness were statistically significant. This indicates that young adults experienced positive changes in economic, employment, social, housing, health, and psychological aspects in the process of asset building participating in the Youth Hope Savings Account Program. Despite the limitation of not being able to control other factors that may have affected changes in young people for three years, such as environmental changes like the COVID-19 pandemic or individual development, this study verified the multidimensional outcomes of the youth asset formation support program by conducting longitudinal analysis of participant changes. Given these results, the study proposes institutional and practical implications.

Influence of Social Overhead Capital Facilities on Housing Prices Using Machine Learning

The South Korean residential real estate market is influenced by both the traditional dynamics of demand and supply and external factors such as housing policies and macroeconomic conditions. Considering the proportion of housing assets in individual wealth, market fluctuations can have significant implications. While previous studies have utilized variables such as GDP growth rate, patent issuance, and birth rate, and employed models such as LSTM and ARIMA for housing price predictions, many have overlooked the influence of local factors. In particular, there has been insufficient investigation into the impact of subway stations and living social overhead capital facilities on housing prices, especially in metropolitan areas. This study seeks to bridge this gap by analyzing the usage trends of subway stations, evaluating the impact of living social overhead capital facilities on housing values, and deriving the optimal machine learning model for price predictions near subway stations. We compared and analyzed a total of eight machine learning regression models, including Linear Regression, Decision Tree, Random Forest, LightGBM, Ridge, Lasso, Elastic Net, and XGBoost, all of which are popular regression models, especially in the context of machine learning and data science. Through comparative analysis of these machine learning techniques, we aim to provide insights for more rational housing price determinations, thereby promoting stability in the real estate market.

Elderly vs. Working-Age Generation: Homeownership and Housing Asset Inequality in a Cross-Country Perspective

This study contributes to the discussion about wealth inequality, albeit from a more detailed housing perspective. It explores tenure inequality, as well as housing assets inequality. The latter includes a different approach than the one that prevails in the previous literature on wealth inequalities, which most often considers total net worth or net housing wealth. This study focuses on gross housing asset distribution, irrespective of mortgage debt, which corresponds with the potential of housing equity accumulation as a source of income in old age. It emphasises the intergenerational context, but simultaneously involves cross-country comparisons that allow for relative assessment of the intergenerational differences. Drawing from the Luxembourg Wealth Study (LWS) dataset the paper presents the results for fourteen developed countries. They suggest that the current working-age generation is to a lesser extent involved into homeownership, as compared to the older generation, which results in a smaller housing equity per household, but simultaneously it experiences greater housing inequality. Furthermore, as shown in a cross-country perspective, homeownership rates and housing asset inequality are negatively correlated. Consequently, higher housing asset inequality by lower homeownership rates are the factors that undermine the usefulness of the asset-based welfare concepts in a policy application. Such findings imply that in the macro perspective the potential of housing as a source of additional income in cash and in kind tends to shrink.

How does owning commercial housing affect the subjective well-being of rural-urban migrants?--The mediating effect of housing assets and the moderating effect of debt.

Houses mean a lot to Chinese people, and in the context of the urban-rural dualist system, town housing has a special significance for rural-urban migrants. Based on the 2017 China Household Finance Survey(CHFS) data, this study uses the Ordered Logit (OLogit) model to empirically test the effect of owning commercial housing on the subjective well-being(SWB) of rural-urban migrants, and through the mediating effect and moderating effect to conduct an in-depth investigation into the intrinsic effect mechanism and further explains the relationship between the two and the current residential location of their family. The results of the study show that: (1) Owning commercial housing can significantly enhances the subjective well-being(SWB) of rural-urban migrants, and the findings remain robust after using alternative model, adjusting the sample size, correcting for sample selectivity bias using propensity score matching(PSM), and controlling for potential endogeneity bias combining instrumental variables and conditional mixed process(CMP); (2) The effect of owning commercial housing on the subjective well-being(SWB) of the first generation rural-urban migrants, rural-urban migrants in the eastern and central regions, and those who obtained housing before the rapid rise in house prices is more pronounced; (3) Commercial housing acts on the subjective well-being(SWB) of rural-urban migrants through the mediating effect of housing assets, and there is some regional variation in the mediating effect of housing assets. At the same time, the household debt acts as a positive moderator between commercial housing and the subjective well-being(SWB) of rural-urban migrants; (4) Even with commercial housing, rural-urban migrants whose families are currently living in rural areas still have a stronger sense of subjective well-being (SWB).

Property Tax, Levy Expectations and Housing Asset Allocation: Evidence from Chinese Households

Property tax reform in China has long been discussed regarding the reform agenda. However, nationwide implementation remains stalled, with no clarity regarding when and how property taxes will be levied. Uncertain expectations affect household housing assets, the most important assets of Chinese residents. To explore the impact of property tax levy expectations on the allocation of such assets, we construct a theoretical model and use four waves of China Household Finance Survey and Baidu index data for estimation. Property tax levy expectations significantly reduce the proportion of household housing assets to total assets, especially for high-income groups, nonrural hukou households, young-headed households, and households in first-tier cities. For multi-home households, the absolute housing asset quantity drops even more. Moreover, house purchase intentions mediate the impact of property tax levy expectations on household housing asset allocation. The findings provide new insights into upcoming property tax reform and highlight the need to develop differentiated property tax brackets and rates.

Process decomposition of expanded rural housing at the rural–urban fringe: evidence from 27,034 buildings in Pudong New Area, Shanghai, China

PurposeFaced with the challenges of rural population decline, combined with the widespread expansion of homesteads in rural areas, local Chinese governments hope to strictly control and minimize rural housing land. Accurately decomposing the process of rural housing expansion and revealing its driving factors will be helpful for land-use regulation by the government.Design/methodology/approachIn this study, an unusually rich dataset of rural housing registration from Pudong New Area in Shanghai is employed. The study aimed to decompose the fragmented accumulation process and its expansion determinants on rural housing assets. The dataset covers all samples of rural households and housing plots at 72 surveyed villages in six towns.FindingsHousing offers profitable capital and earning assets to villagers at the urban fringe, so they have a powerful incentive to build and expand more. The results of this analysis showed that the expansion of rural housing is largely due to the haphazard construction of auxiliary rooms by villagers, especially on plots of arable land that are adjacent to their houses that have been stealthily converted into auxiliary rooms and sheds. Low costs and weak penalties have led to an increase in rent-seeking expansions to rural houses. Houses with the smaller initial areas, families with more laborers and household heads, and the proximity of villages to downtown with convenient living services were the main driving factors for expanding houses. A concerted effort is needed to control the disorganized and unlicensed expansion of housing. This effort should include formulating areas for free use by villagers, high taxes on overused areas, serious penalties for unlicensed housing expansion and effective land-use planning.Research limitations/implicationsAn understanding of the expansion status and control measures related to rural houses in Shanghai provides an important reference that can help to guide the formulation of rural housing policies, and the sustainable development of cities worldwide. Of course, this study cannot generalize about housing distribution and expansion status worldwide based on the study area in China, because China's land tenure policies are unique. But land registry data exists that makes research like this feasible. There is a need to carefully examine the detailed housing distribution in each country before it can be decided on how best to address the disorderly increase in rural housing stock, and promote the reduction of rural residential expansion.Originality/valueFirst, the process of rural housing expansion by using an unique dataset which covers ten thousands of samples is revealed. Second, the results have policy implications for reducing the amount of idle and inefficiently rural homestead. The focus is on rural housing growth and its driving factors in Shanghai, and the villagers' motivations for housing expansion are explored.

한국 가계부채의 결정요인에 대한 실증분석

South Korea's household debt is an important subject of research because it is constantly increasing in size and relatively large compared to other countries. In this study, the determinants of household debt are analyzed from the perspective of economic environment and policy factors. To this end, regression analysis was performed household debt and explanatory variable time series data from Q4 2007 to Q3 2022. The main results obtained from the empirical analysis are as follows. First, economic growth supports households' ability to afford debt. Second, the housing asset price factor contributed to the increase in household debt. Third, mortgage lending decreases when loan interest rates rise, but the effect of interest rate on aggregate credit is somewhat unclear. Fourth, the suppression and relaxation of housing lending through regulation has a significant impact on the size of mortgage lending. The results of this analysis suggest the following policy implications. First of all, in order to manage household debt, it is necessary to stabilize housing prices through housing loan policies. In addition, stable real economic management is required to support households' ability to afford debt. And managing household debt requires appropriate monetary policy and the operation of housing loan regulations.

Rents, refugees, and the populist radical right

The recent successes of populist radical right (PRR) parties have caused major upheavals across European political landscapes. Yet, the roots of their rising popularity continue to be widely debated. We contribute to these debates by advancing a thus far underexplored argument of rising rent burden as key to understanding contemporary PRR vote and nativist attitudes. Rising rents lie at the heart of growing concerns related to housing (un)affordability and (over)burden across Western democracies, directly affecting the economic and social well-being of substantial numbers of citizens. PRR parties, we argue, stand to gain from politicizing such concerns in distinct economic and nativist terms, especially amidst challenges like the European refugee crisis, which provoked an urgent need to house unprecedented inflows of refugees. Drawing on individual-level panel data from Germany, we uncover a strong relationship between rising rents, PRR vote, and hostile attitudes toward refugees. In calling attention to rising rents, our study adds important insights into scholarship on the politics of housing markets not only from the perspective of home ownership and housing assets, but also rents. In so doing, we also refine understandings of the conditions under which economic factors shape PRR support

Rising Income and Wealth Inequality in China: Empirical Assessments and Theoretical Reflections

ABSTRACT The lack of up-to-date data has hindered recent research on China’s income and wealth inequality. This article fills this void by bringing current official and private data sources looking at these inequalities. The authors further investigate the underlying structural and sectoral policies causing these disparities. They find that the top 1% income share roughly equals that of the bottom 50%. The personal wealth share going to the top 1% exceeds by 5 times the wealth going to the bottom 50%. Failures in redistributive policies have primarily caused these growing income and wealth gaps. Sectoral and national development policies favoring the real estate industry at the expense of the manufacturing industry have also resulted in large-scale wealth shifts, with Chinese households holding increasing housing assets and residential mortgages. This article shows that Piketty’s patrimonial capitalism not only applies to capitalist countries but also extends to China’s socialist market economy.

Relationship between subjective well-being and depressive disorders: Novel findings of cohort variations and demographic heterogeneities.

This paper uses a large-scale nationally representative dataset, the Chinese General Social Survey, to examine the relationship between subjective well-being and depressive disorders. Statistical results indicate that higher levels of subjective well-being help decrease perceived depression. Robustness checks are carried out using different types of explanatory and dependent variables, various regression models, penalized machine learning methods, instrumental variable approaches, and placebo tests, all of which lend further credence to the above findings. Based on it, heterogeneities in the relationship between subjective well-being and self-rated mental disorders are explored. In respect of variations in age cohorts, it is found that the absolute values of happiness's estimated coefficients are smaller in the 20-30 and 30-40 age groups, while that in the 40-50 age group increase substantially. In older cohorts, the estimates remain at higher levels while fluctuating to some degree. Furthermore, the significantly negative interaction between happiness and age proves that age amplifies subjective well-being's effect on perceived depressive disorders. With age increasing, the impact of happiness on reducing perceived depression tends to be stronger. Therefore, for older people, subjective well-being plays a more important role in suppressing self-rated depression. Heterogeneities of the relationship between happiness and perceived depressive disorders in subgroups with different demographic characteristics are also investigated. It is found that the negative correlation between subjective well-being and self-rated depression is stronger among those with higher educational levels, living in urban areas, being members of the Communist Party of China, having pensions, and owning more housing assets. However, gender, ethnic identity, religious belief, and marital status exert no significant moderating effects.

HOUSING DIFFERENCES, CREDIT CONSTRAINTS, AND HOUSEHOLD ENERGY CONSUMPTION: AN EMPIRICAL STUDY FROM HOUSEHOLD TRACKING SURVEY DATA IN CHINA

ABSTRACT Although many studies have shown that housing wealth impacts household consumption behavior patterns, they have not incorporated housing characteristics into their research framework. Against the background of China’s reformed housing system, this study therefore constructs a theoretical framework of housing differences, credit constraints, and household energy consumption by adopting sample data from China Family Panel Studies (CFPS) of 7064 households in 25 provinces, municipalities, and autonomous regions in China. Multiple regression methodology is used based on the emission peak and carbon neutrality goal proposed by the Chinese government in 2021. The results show that housing differences significantly impact household energy consumption; housing assets have a significant wealth effect on household energy consumption; energy consumption of house owners increases due to the appreciation of their housing; and that the housing proportion of a household’s gross assets has a significant negative impact on household energy consumption. Furthermore, based on spatial distribution, it is found that the energy consumption level of households with housing properties in the developed regions of central and eastern China is significantly higher than that in the western regions. The study provides empirical evidence for China to build a linkage mechanism between energy policy and real estate policy and provides empirical support for the implementation of differentiated policies of energy consumption.

Effects of housing asset deflation on shrinking cities: A case of the Tokyo metropolitan area

With shrinking cities becoming a global issue, declining housing demands due to declining population leads to a reduction in land prices. Housing asset value deflation occurs mainly in suburbs, which has an economic effect on elderly households. Although some issues have already been indicated, it is unclear whether the deflation of housing assets will have a significant impact on shrinking cities. We used 209 municipality bases to predict the decreasing value of housing assets in the Tokyo metropolitan area from 2019 to 2045. The deflation of housing asset value was estimated by considering the regional differences in population. We adopted a regression model for analysis. The value of housing asset deflation is projected to be approximately 94 trillion JPY by 2045. Although the degree of deflation differed by municipality, the deflation of housing asset value occurred in nearly all municipalities: Central Tokyo was an exception. Additionally, the deflation value in many suburban municipalities exceeded 10 million JPY per household. Thereafter, a case study analysis was conducted using the average household in the Tokyo metropolitan area. The study results imply that deflation of housing assets is unavoidable for households in suburbs, and it becomes new barriers to promoting compact cities. • Deflation of the housing assets due to population decline was clarified. • Projections were estimated at approximately 94 trillion JPY. • The housing assets deflation value exceeded 10 million JPY per household. • Worsening of household budget, causing barriers on promoting compact cities

Analysis of the Effectiveness of Real Estate Market to Household Consumption under Macro-control Policy

Housing has become an important part of household wealth in China. On the one hand, it can promote household consumption through the wealth effect, on the other hand, it may reduce household consumption due to the "house slave effect". Throughout the research process of housing assets, most scholars study the horizontal level, through the data tracking of different families, to explore the impact of housing assets on household consumption. Based on the data from China Household Finance Survey from 2011 to 2019, this paper constructs a balanced panel, and uses OLS and fixed effect model to analyze the impact of housing asset appreciation on household consumption. The results show that the appreciation of housing assets can promote household consumption. In the heterogeneity analysis, for the families with only one suite, the housing is mostly to meet the living demand, and the role of housing assets in promoting consumption is small. In addition, for families in the central and western regions, under the influence of housing asset appreciation, the level of household consumption is higher. Mechanism analysis shows that the appreciation of housing assets alleviates household credit and makes households smooth consumption by borrowing. The policy implications of this paper are: to strengthen the implementation of "purchase restriction", improve the proportion of public participation in macro-control, and further improve the real estate industry supervision system.

RE-EMPLOYMENT MANDATE IN SINGAPORE: EMPLOYMENT AND HEALTH OUTCOMES

Abstract Older workers can be a crucial resource to meet manpower needs for aging society. This is especially so for countries where older adults are expected to live longer and healthier. In 2012, Singapore implemented the Retirement and Re-employment Act (RRA) which obliged employers to offer re-employment to eligible workers. With RRA, mature workers have the flexibility to work beyond retirement age. Using the Retirement and Health Study (RHS) data and regression discontinuity design, we find that, after adjusting for education, marital status, housing asset and expenditure, the re-employment mandate helps delay retirement in the sample by 8.7%, with a larger impact of 9.1% among the males, as compared to the females of 7.3%. More non-retirees reported that they have very good or excellent health compared to retirees. Retirement leads to increase in healthcare utilization. Does the work environment affect how one responds to retirement option? We observe a correlation between post-retirement wellbeing and stress at work. Our study also suggests that mandatory re-employment offers are less effective in encouraging those in physically demanding jobs to continue working. Re-employment mandate helped raise the employment rate for workers in high-routine, high-manual jobs by 6.1 per cent. These would include craft workers and trade workers. It raised the employment rate for workers in highly routine and low-manual occupations by 26.9 per cent. These include workers in the hospitality, retail and services sectors. In sum, the mandate together with other inclusive work policies have been useful to mitigate impacts of societal ageing in Singapore.

Save, Spend, or Give? A Model of Housing, Family Insurance, and Savings in Old Age

Abstract How do housing and family shape the savings, spending, and inter-generational transfer behaviour of the elderly? Using the Health and Retirement Study, we document that inter-generational transfers to children are substantially backloaded, that homeowners dis-save much more slowly than renters but often sell their houses when entering a nursing home, and that care by children slows down nursing home entry and is linked to larger bequests, particularly of housing. To rationalise these facts, we develop a dynamic, non-cooperative model of the family with an indivisible housing asset and joint bargaining between elderly parents and their children over the housing and care arrangements of the parents. The model generates realistic savings and care choices and matches the timing of transfers and home liquidations. A key novelty is the housing-as-commitment channel: In the absence of long-run family contracts, housing provides a commitment device for more efficient savings. We find that this channel increases homeownership in old age by one-third and families’ willingness to pay for houses by 5–10%. This mechanism also facilitates informal care, slows down spending, and leads to larger bequests, implications that we support empirically.

Heterogeneity of public services, gender identity, and the spatial allocation of real estate

This study examines the spatial allocation of real estate in an equilibrium model integrating gender identity in the marriage market and the heterogeneity of public services according to housing property ownership. We found that low-skill people buy houses in small cities, with more men buying houses than women. Conversely, people with high ability buy houses in big cities, with more women buying houses than men. The more that the public services are exclusively reserved for house owners, the higher the degree of housing asset allocation for women buying houses in big cities and for men buying houses in small cities.

Why does higher education sometimes lead to unhappiness in China? An explanation from housing assets.

This article aims to answer the question that whether higher education would lead to happier life in China and tries to provide some explanations from the perspective of housing asset. Using data from four waves of China Household Finance Survey (CHFS), we find that higher education on average is significantly negatively correlated with people's happiness in urban China. Higher education tends to prevent people from achieving "extremely happy" lives; instead, it is more likely to lead to "acceptable" lives. Based on the realities of housing market in urban China, we find that housing asset plays the mediating role in the relationship between higher education and happiness. Specifically, years of schooling could evidently compress the years of being homeowners; as a result, highly educated people generally have more unpaid housing debts and bear more housing purchase costs due to the soaring housing prices. Meanwhile, higher education has negative effect on people's happiness in cities with relatively high housing prices, while this effect is insignificant in cities with relatively low housing prices. Moreover, the market-oriented housing reform that launched in 1998 has negative impact on highly educated people's happiness, since it has dramatically boosted housing prices and essentially changed housing distribution system for urban employees. Besides, we also find that Ph.D graduates are the relatively unhappiest people compared to bachelors or masters. Obviously, our findings have important policy implications for Chinese government to understand and resolve the "education-happiness paradox."

Price dispersion and time-on-market in the housing market

Imperfect and costly information generates price dispersion in the market. This study employs data on housing assets listed for sale on a leading online classified home service in Israel to assess the effect of quality-adjusted housing price dispersion on time-on-market. Using survival analysis estimation, we find evidence that the hazard rate of sale significantly decreases with quality-adjusted price dispersion: a 1% increase in the standard deviation of the quality-adjusted housing price is associated with a decrease of about 0.63% in the likelihood of a sale. Results are robust to a series of model and sample specifications. As information is associated with decreased price dispersion in the market, our study supports the call for increased availability of information in real estate markets that would decrease time-on-market and transaction costs associated with the time, search, and negotiation required for achieving a transaction.

How do housing asset and income relate to mortality? A population-based cohort study of 881220 older adults in Canada

ObjectiveA growing body of research has documented a well-established link between socioeconomic conditions and mortality among older adults. This study aims to understand (a) whether housing assets and income are associated with mortality and (b) if the value of housing assets affects the relationship between income and mortality; both questions are studied among older adults aged 65 or over in Canada. MethodsUsing the population-based linked dataset (2011 Canadian Census Health and Environment Cohorts) of 881,220 older adults over six years of follow-up (2011–2017), this study uses survival analysis to estimate the link between housing assets, income level and mortality. We also assess the potential moderating effect of housing asset levels on the association between income and mortality by categorizing individuals along two dimensions: whether they are income-poor and whether they are housing assets-poor. ResultsThe mortality rate was higher among both the lowest asset (HR = 1.346) and the lowest income group (HR = 1.203). The association is pronounced for older adults aged 65 to 74. Assets did not significantly moderate the link between income and mortality. Income-related inequalities in mortality are observed among each group of housing asset level. Compared to those who are neither income-poor nor housing assets-poor, individuals who were income poor but not housing assets-poor were more likely to die (HR = 1.067) over seven years of follow-up, and people who were housing assets-poor only were more likely to die (HR = 1.210). Being housing-assets poor and income-poor yielded a higher hazard ratio (HR = 1.291). ConclusionsHousing assets and income are associated with mortality of older adults. It is important to identify people who are assets poor and/or income poor who are at higher risks of mortality. Social policies aimed at reducing income insecurity and housing insecurity can reduce mortality inequalities.