Financial infrastructure and house prices
2013 (English)Report (Other academic)
We argue that banks operating in a local market possess better information about the local housing market than do non-local banks. Possessing this information may influence their willingness to grant loans to house buyers and the specifics of the loan terms, which in turn may affect house prices because credit facilitation makes the housing market more efficient.
Using a panel data set covering a period from 1993 to 2007 and involving 274 municipalities in Sweden, we establish a positive causal influence of local bank presence on local house prices. There are significant spatial and spillover effects – that is, banks in a municipality affect the housing markets in neighboring municipalities, although to a lesser extent than in their own municipality. Similar results are obtained through a gravity model. The results are robust over time and municipality size.
Place, publisher, year, edition, pages
Stockholm: Centre for Transport Studies, CTS , 2013.
CTS Working Paper, 2013:7
Economics, Resident, Price
Research subject SAB, Qa Economics and finance
IdentifiersURN: urn:nbn:se:vti:diva-7480OAI: oai:DiVA.org:vti-7480DiVA: diva2:780473
Presented at 51st Congress of the European Regional Science Association International (ERSA) in Barcelona (Spain), August 30-September 3, 2011 and Western Regional Science Association 51st Annual Meeting, Hawaii. February 8–11, 20122015-01-142015-01-142016-08-30Bibliographically approved