American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
No Price Like Home: Global House Prices, 1870-2012
American Economic Review
vol. 107,
no. 2, February 2017
(pp. 331–53)
Abstract
How have house prices evolved over the long run? This paper presents annual house prices for 14 advanced economies since 1870. We show that real house prices stayed constant from the nineteenth to the mid-twentieth century, but rose strongly and with substantial cross-country variation in the second half of the twentieth century. Land prices, not replacement costs, are the key to understanding the trajectory of house prices. Rising land prices explain about 80 percent of the global house price boom that has taken place since World War II. Our findings have implications for the evolution of wealth-to-income ratios, the growth effects of agglomeration, and the price elasticity of housing supply.Citation
Knoll, Katharina, Moritz Schularick, and Thomas Steger. 2017. "No Price Like Home: Global House Prices, 1870-2012." American Economic Review, 107 (2): 331–53. DOI: 10.1257/aer.20150501Additional Materials
JEL Classification
- C43 Index Numbers and Aggregation; leading indicators
- N10 Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: General, International, or Comparative
- N90 Regional and Urban History: General
- R31 Housing Supply and Markets