University of Oulu

Elias Oikarinen, Steven C. Bourassa, Martin Hoesli, Janne Engblom, Revisiting metropolitan house price-income relationships, Journal of Housing Economics, Volume 61, 2023, 101946, ISSN 1051-1377,

Revisiting metropolitan house price-income relationships

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Author: Oikarinen, Elias1,2,3; Bourassa, Steven C.4; Hoesli, Martin5,6;
Organizations: 1Oulu Business School, University of Oulu, Finland
2Department of Built Environment, Aalto University, Espoo, Finland
3School of Economics, University of Turku, Turku, Finland
4Runstad Department of Real Estate, University of Washington, Seattle, WA, United States of America
5Geneva School of Economics and Management and Swiss Finance Institute, University of Geneva, Geneva, Switzerland
6School of Business, University of Aberdeen, Aberdeen, United Kingdom
Format: article
Version: published version
Access: open
Online Access: PDF Full Text (PDF, 5.1 MB)
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Language: English
Published: Elsevier, 2023
Publish Date: 2023-08-11


We explore long-term patterns of the house price-income relationship across the 70 largest U.S. metropolitan areas. In line with a standard spatial equilibrium model, our empirical findings indicate that regional house price-income ratios are typically not stable, even over the long run. In contrast, panel regression models that relate house prices to aggregate personal income and allow for regional heterogeneity yield stationary long-term relationships in most areas. The house price-income relationship varies significantly across locations, underscoring the importance of using estimation techniques that allow for spatial heterogeneity. The substantial regional differences are closely related to the elasticity of housing supply.

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Series: Journal of housing economics
ISSN: 1051-1377
ISSN-E: 1096-0791
ISSN-L: 1051-1377
Volume: 61
Article number: 101946
DOI: 10.1016/j.jhe.2023.101946
Type of Publication: A1 Journal article – refereed
Field of Science: 111 Mathematics
Funding: This work was supported by the Strategic Research Council at the Academy of Finland (first author; decision numbers 352450 and 352451) and the West-Finland Housing Association of Public Utility.
Copyright information: © 2023 The Author(s). Published by Elsevier Inc. This is an open access article under the CC BY license (