Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/196168
Decomposing the impact of immigration on house prices
Journal Title
Authors
Director/Tutor
Additional contribution
Journal ISSN
Volume Title
Abstract
Immigrant inflows affect local house prices by increasing housing demand when when housing supply is fixed. In this paper, I show that we can formally decompose totaldemand changes into changes stemming from an immediate increase in population due to new arrivals (“partial effect”) and additional changes in demand from relocated natives (“induced effect”). I propose a methodology to separately estimate these two effects using Spanish provinces’ data from 2001- 2012. Applying an instrumental variables approach, I find that a 1 p.p. increase in the immigration rate increases average house prices by 3.3% and rents by 1%. Partial demand estimates are 24% smaller than the total estimates, due to immigrants and natives locating in the same provinces. The results show that accounting for the impact of immigration on native location choices is key to understanding net demand adjustments, as partial and total effects can significantly differ depending on native population mobility.
Immigrants
Immigrants
Related resource
Subject (English)
Citation
Citation
SANCHIS-GUARNER, Rosa. Decomposing the impact of immigration on house prices. IEB Working Paper 2022/10. [consulted: 16 of October of 2026]. Available at: https://hdl.handle.net/2445/196168