User costs and bubbles in land markets
In asset markets with speculative behavior, the long-run equilibrium relationship between asset prices and the discounted flow of future rents may become invalid. We distinguish short-term user costs and longer-term user costs with variables that reflect fundamentals. We show how to work around the empirical problem of measuring speculative expectations about asset price changes and derive a simple user cost formula where the asset price change in the short-term relationship comes out as the long-run change in the overall price level.
Year of publication: |
2009
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Authors: | Schreyer, Paul |
Published in: |
Journal of Housing Economics. - Elsevier, ISSN 1051-1377. - Vol. 18.2009, 3, p. 267-272
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Publisher: |
Elsevier |
Keywords: | Housing bubble User costs Housing fundamentals Speculative behavior Capital theory |
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