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Is There Long-run Convergence among Regional House Prices in the UK?

Authors :
Homes, Mark J.
Grimes, Arthur
Source :
Urban Studies (Sage Publications, Ltd.). Jul2008, Vol. 45 Issue 8, p1531-1544. 14p. 4 Charts, 5 Graphs.
Publication Year :
2008

Abstract

This paper investigates the long-run convergence of regional house prices in the UK. Existing studies have failed to reach a consensus on whether or not regional house prices exhibit long-run convergence with each other. The application is proposed of a new test involving unit root testing of the first principal component based on regional-national house price differentials. Using mix-adjusted quarterly data for 1973-2006, it is found that the first principal component is stationary. This suggests that all UK regional house prices are driven by a single common stochastic trend. Further analysis suggests that those regions that are more distant from London exhibit the highest degrees of persistence with respect to deviations in house price differentials. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
00420980
Volume :
45
Issue :
8
Database :
Academic Search Index
Journal :
Urban Studies (Sage Publications, Ltd.)
Publication Type :
Academic Journal
Accession number :
34477690
Full Text :
https://doi.org/10.1177/0042098008091489