- Thursday, July 11
- 12:15 PM
- Kaiserplatz 7-9, 4th floor, Room 4.006
Forgotten Booms and Busts: New Sale and Rental Price Indices for US Housing, 1890-1990
This presentation introduces a project that will generate new housing price indices (HPIs), in both sale and rental segments, of U.S. urban housing. The full project will cover 50 cities since the end of the U.S. Civil War. Findings to be presented in this presentation are based on a dataset of nearly one million manually digitized real estate listings for twelve major metropolitan areas from 1890 to 1990. Hedonic methods are used on this dataset, giving constant-quality indices of the sale and rental price for housing at quarterly frequency. It finds strong evidence that existing HPIs, based typically on more elementary datasets and methods, significantly understate housing price inflation. This is relatively pervasive across time in the case of the sales segment and more specifically in two postwar episodes in the case of the rental segment. Given the importance of housing in both wealth portfolios and consumption baskets, the findings have a number of implications. These include revising estimates of the rate of return on ‘everything’, as well as the long-run rates of change in cost and standard of living. The new national, city-level and sub-city indices have a wide range of potential applications, including understanding the impact of changes in credit and supply conditions, technological innovations such as transport, and industrial and demographic transition.