Discussion paper

DP15409 Location, Location, Location: Manufacturing and House Price Growth

Exploiting data on tens of millions of housing transactions, we show that (1) house prices grew by less in manufacturing-heavy US regions and (2) that this pattern is especially present for the lowest-value homes. Counterfactual accounting exercises reveal that regional di↵erences in the growth of these lowest-value homes more than fully account for an observed increase in overall house price inequality. We conclude that the relative economic decline of manufacturing- heavy areas extends far beyond income and employment flows to include shifts in important local asset prices, a pattern which matters for total house price inequality.

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Citation

Jaimovich, N, S Terry and N Vincent (2020), ‘DP15409 Location, Location, Location: Manufacturing and House Price Growth‘, CEPR Discussion Paper No. 15409. CEPR Press, Paris & London. https://cepr.org/publications/dp15409