Previous empirical research shows that ripple-effects exist between regional housing markets in several countries around the world. This paper provides a national and international insight to the Danish housing market from 1974 to 2012. We use changes in real house prices within Denmark to carry out our research. As in other scientific papers on this subject, we use a framework consisting of tests for stationarity, cointegration and finally Granger causality. The results show that Eastern Denmark has a dominant role in comparison to Western Denmark. Particularly Copenhagen seems to be the starting point of a ripple-effect moving from east to west. The findings support the international literature as the economic centre of Denmark is Region Hovedstaden - specifically Copenhagen. Besides the national part of the research, we have also tested whether Denmark takes part in an international ripple-effect. We find that the price changes in the Danish housing market are Granger caused by the Norwegian market. We also find evidence that this seems to be the case from London to Copenhagen. Furthermore, our research found a significant causality that a ripple-effect exists from the housing market of Copenhagen to the housing market of Stockholm.
|Educations||MSc in Finance and Accounting, (Graduate Programme) Final Thesis|
|Number of pages||153|