Abstract
One can conceptualize a house as a bundle comprising a reproducible tangible structure and a non-reproducible plot of land. When the value of a home is decomposed this way, land capitalizes the market value of a home's location. We develop a formal relationship between the dynamics of house prices, structures costs and land prices, and thereby construct the first constant-quality price and quantity indexes for the aggregate stock of residential land in the United States. In a range of applications we show that these series can shed light on trends, fluctuations and regional variation in the price of housing.
Original language | English (US) |
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Pages (from-to) | 2595-2620 |
Number of pages | 26 |
Journal | Journal of Monetary Economics |
Volume | 54 |
Issue number | 8 |
DOIs | |
State | Published - Nov 2007 |
Externally published | Yes |
All Science Journal Classification (ASJC) codes
- Finance
- Economics and Econometrics
Keywords
- House prices
- Land
- Land prices
- Land value