91¶ÌÊÓƵ

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House Prices and Quantities Around the World

With the Lunch Seminar series, the Department of Finance is bringing eminent and up-and-coming researchers from around the world to Luxembourg.

Abstract

We establish several first-order facts using house price and quantity data for middle- and high-income countries. First, housing units and rooms per person rise with per capita income and then asymptote so that additional increases in income are uncorrelated with housing quantities. Second, growth in housing units is strongly correlated with population growth at all incomes. Third, real house prices and housing expenditure shares rise in near-constant proportion with per capita income. A model with non-homothetic demand for housing space, homothetic demand for housing quality, and upward-sloping supply of the unit-quality housing bundle can explain these relationships. Our findings are consistent with Baumol cost disease interpretations of global housing affordability, but are not indicative of increasingly tight supply constraints, as a model where the quantity of housing asymptotes because supply is increasingly inelastic does not match the facts.

91¶ÌÊÓƵ the speaker

is a Distinguished Endowed Chair in Macroeconomics and Public Finance and Professor at UC San Diego.

Language

English.

This is a free event. Registration is mandatory.

Cold lunches are provided to registered participants only.

In collaboration with

Supported by the Luxembourg National Research Fund (RESCOM/2025/LE/19440690)