Consumer sentiment and house prices: asymmetric evidence from state-level data in the United States
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 10 September 2021
Issue publication date: 1 December 2022
Abstract
Purpose
The purpose of this paper is to assess and compare the symmetric and asymmetric effects of consumer sentiment on house prices in each state of the USA. This is the first study that uses state-level data.
Design/methodology/approach
Both linear and nonlinear autoregressive distributed lag approaches are used to assess the asymmetric effects of consumer sentiment on house prices in each state of the USA.
Findings
When the authors estimated a linear symmetric model, this paper found short-run effects of consumer sentiment on house prices in 34 states that lasted into the long-run in only 13 states. The comparable numbers by estimating a nonlinear asymmetric model were 47 and 22, respectively. The increase in the number of states where consumer sentiment affects house prices was attributed to the nonlinear adjustments of consumer sentiment.
Originality/value
The authors deviate from previous research and assess the impact of consumer sentiment on house prices by using data from each state of the USA. The authors also deviate from previous research by demonstrating that the effects could be asymmetric. No study has done this at the state-level.
Keywords
Acknowledgements
All views and information expressed on this paper do not represent the opinions of any entity whatsoever with which the author has been, is now or will be affiliated. Valuable comments of two anonymous referees are greatly appreciated. Any error, however, is our own responsibility.
Citation
Bahmani-Oskooee, M., Ghodsi, H. and Hadzic, M. (2022), "Consumer sentiment and house prices: asymmetric evidence from state-level data in the United States", International Journal of Housing Markets and Analysis, Vol. 15 No. 5, pp. 1088-1121. https://doi.org/10.1108/IJHMA-06-2021-0075
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited