3 ms·
Wouldn't the naive expectation be that prices would rise somewhat but that if the markets in question were competitive that this would not be severe?
by aptwebapps 6y ago
Wouldn't the naive expectation be that prices would rise somewhat but that if the markets in question were competitive that this would not be severe?
- harry8 6y agoI direct your attention to the market for "housing"
- aptwebapps 6y agohttps://news.ycombinator.com/item?id=23857621 https://news.ycombinator.com/item?id=23857621 gets at what I was thinking but was too lazy to articulate.
- deleted 6y ago[deleted]
- mdorazio 6y agoHousing prices are barely correlated with incomes in a meaningful way across cities, let alone caused by them. See [1]. The #1 determinant of housing prices is supply, which is usually an issue of regulation, not of local ability to pay rent/mortgage. There's not much consensus on this topic among economists since there are so many confounding factors - the best paper I've seen so far is [2] which finds that income increases via minimum wage hikes might increase rents anywhere from a quarter to a half of the wage increase, absent other factors. [1] https://www.cnbc.com/2019/03/07/heres-the-share-of-income-that-goes-to-rent-in-cities-across-the-us.html https://www.cnbc.com/2019/03/07/heres-the-share-of-income-th... [2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3282661 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3282661