Mankiw and Weil have estimated a demographically-driven real house price equation on annual data from the 1947-87 period and used it to forecast real house prices over the 1988-2007 period. The result is their infamous 47 percent real decline. Their equation really only fits data from the 1950s...

While there seems to be no end to estimates of housing tenure determinants, prior studies have not accounted for the simultaneity of tenure choice with household formation, labor supply or the marriage decision. Our estimates are superior to those in the literature both because we address these...