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Residential buildings and the cost of construction: new evidence on the efficiency of the housing market

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dc.contributorVirginia Techen
dc.contributor.authorRosenthal, S. S.en
dc.contributor.departmentEconomicsen
dc.date.accessed2014-02-05en
dc.date.accessioned2014-02-21T14:20:18Zen
dc.date.available2014-02-21T14:20:18Zen
dc.date.issued1999-05en
dc.description.abstractPresent value studies of asset market efficiency are controversial because they compare asset prices to unobserved discounted streams of future rents. As an alternative, if housing markets are efficient, then the price of residential capital or buildings should satisfy the following two conditions: (i) deviations between new building prices and construction costs should disappear faster than construction lags and have no effect on construction, and (ii) temporary building price shocks should dissipate at a similar rate for different vintage buildings. Results from an error-correction model support both hypotheses for single-family housing in Vancouver, British Columbia. This implies that the implicit market for residential buildings is efficient and that any inefficiencies in the housing market must lie in the market for land itself.en
dc.description.sponsorshipReal Estate Institute of British Columbiaen
dc.description.sponsorshipSocial Science and Research Council of Canada (SSHRC)en
dc.identifier.citationRosenthal, SS. "Residential buildings and the cost of construction: new evidence on the efficiency of the housing market," Review of Economics and Statistics 1999 Vol. 81 No. 2, 288-302 doi: 10.1162/003465399558085en
dc.identifier.doihttps://doi.org/10.1162/003465399558085en
dc.identifier.issn0034-6535en
dc.identifier.urihttp://hdl.handle.net/10919/25519en
dc.identifier.urlhttp://www.mitpressjournals.org/doi/pdf/10.1162/003465399558085en
dc.language.isoen_USen
dc.publisherMIT Pressen
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subjecturban-growthen
dc.subjectstock-pricesen
dc.subjectland pricesen
dc.subjectredevelopmenten
dc.subjectbubblesen
dc.subjectcointegrationen
dc.subjectvectorsen
dc.subjectmodelsen
dc.titleResidential buildings and the cost of construction: new evidence on the efficiency of the housing marketen
dc.title.serialReview of Economics and Statisticsen
dc.typeArticle - Refereeden

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