House Prices and Public Debt

Mads Gjedsted Nielsen, Aleksandra Rzeznik

Publikation: KonferencebidragPaperForskningpeer review

Abstrakt

By using the 2002 case of fraud in the Danish municipality Farum by then mayor Peter Brixtofte as an exogenous shock to public debt of 1 billion DKK, I estimate the effect of public debt on house prices. I find that the average home ownership lost about 570,000 DKK or as much as 29% of the average house price in the municipality. Furthermore, I document that the aggregate house price loss of 2.1 billion DKK greatly exceeds the increase in public debt of 1 billion DKK. I find that the drop in house prices is sustained 1 year, indicating that the housing market initially overreacts but the overreactions is dampened over time.
OriginalsprogEngelsk
Publikationsdato2014
Antal sider24
StatusUdgivet - 2014
BegivenhedEuropean Economic Association & Econometric Society 2014 Parallel Meetings - Toulouse, Frankrig
Varighed: 25 aug. 201429 aug. 2014
http://www.eea-esem.com/EEA-ESEM/2014

Konference

KonferenceEuropean Economic Association & Econometric Society 2014 Parallel Meetings
Land/OmrådeFrankrig
ByToulouse
Periode25/08/201429/08/2014
Internetadresse

Emneord

  • Difference-in-differences
  • Property value
  • Hedonic
  • Natural experiment
  • Public debt

Citationsformater