Preprint

Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets

We use novel and unique data to study the effect of price changes in the market for luxury and middle class homes. We find that luxury home sales respond less to price changes than the middle-class home sales; in the market for luxury homes, past prices affect current prices; luxury home prices persist; and prices of luxury homes are stickier than prices of middle-class homes. Recent macroeconomic models predict that housing markets can have counter-cyclical effect, if home prices are flexible. Our findings imply that home prices, especially luxury home prices, may not be flexible enough to generate such effect.

Language: Englisch

Classification: Wirtschaft
Price Level; Inflation; Deflation
Business Fluctuations; Cycles
Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
Information and Market Efficiency; Event Studies; Insider Trading
Consumer Economics: Empirical Analysis

Subject: Housing market
Luxury housing
Housing demand
Price rigidity
Sticky prices
Predictability
Veblen Effect

Event: Geistige Schöpfung

(who): Levy, Daniel
Snir, Avichai

Event: Veröffentlichung

(who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft

(where): Kiel und Hamburg

(when): 2018

Handle: http://hdl.handle.net/10419/175843

Last update: 10.03.2025, 11:44 AM CET

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Object type

Preprint

Associated

Levy, Daniel
Snir, Avichai
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft

Time of origin

2018

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Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets

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