CRIEFF Discussion Paper Number 0508
A Model of
Regional Housing Markets in England and Wales
Arnab Bhattacharjee and
Chris Jensen-Butler
Abstract
We propose and estimate an economic model of regional
housing markets in England andWales, incorporating
both the macroeconomic relationships between prices, demand and supply and a
microeconomic model of search, matching and price formation. The empirical
model, estimated separately for each of the 10 government office regions in England
and Wales, validates the economic model. However, we find substantial
heterogeneity across the regions, which is potentially useful in informing
housing and land-use policies. In addition, the model allows completely
unrestricted inter-regional spatial relationships. The estimated spatial
autocorrelations imply different drivers of spatial diffusion in different regions,
the understanding of which can be improved by further work.
JEL Classifications
R21; R31; R33; C31.
Keywords
Housing markets; Search and matching; Spatial diffusion; Housing demand;
Housing Supply.
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