Kishor, N. Kundan; Morley, James - School of Economics, UNSW Business School - 2014
ratio for housing may not be mean-reverting. Our approach decomposes the price-rent ratio into expected real rent growth …, expected housing return and a non-present-value (NPV) component that represents the deviation of the price-rent ratio from its … into account non-stationarity of the price-rent ratio. To estimate this modified present-value model, we use the unobserved …