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Does asymmetric nexus exist between agricultural land and the housing market? Evidence from non-linear ARDL approach

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Abstract

Expectedly, urbanization is often associated with constant degradation of natural habitat. In most cases, as demand for housing increases, natural habitat like agricultural land, forestry, and water bodies gradually gives way to building structures. Against this backdrop, the current study investigates the asymmetric nexus of agricultural land and housing market vis-à-vis house prices. The study employed the yearly data from 1976 to 2015 for the case of Sweden and used economic policy uncertainty (EPU) as a control variable in non-linear autoregressive distributed lag (NARDL) approach. The finding notes a significant and positive short- and long-run relationship between housing price and agricultural land especially when there is a negative shock on agricultural land. But when there is a negative shock on EPU, the impact on housing price is significant and negative for both short run and long run. While an asymmetric long-run relationship is significant and positive between EPU and housing price, such significant occurrence do not exist for agricultural land. Hence, in meeting housing demand and mitigating an escalated growth in house prices, implementation of effective land use policy is encouraged.

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Notes

  1. The detail analysis of demand and supply of land regarding house prices can be followed up from Shen et al. (2018).

  2. Detail information about the real house price index can be obtained from the OECD (http://www.oecd.org/).

  3. World Bank Development Indicator is the sources of agricultural land information (https://data.worldbank.org/).

  4. More can read on Economic Policy Uncertainty index (2018) (http://www.policyuncertainty.com/).

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Acknowledgments

Authors’ gratitude is extended to Prof. Mehmet Balcilar for his kind mentorship as well as prospective editor and reviewers that will/have spared time to guide toward a successful publication.

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Authors and Affiliations

  1. Department of Economics, Eastern Mediterranean University, Via Mersin 10, Turkey

    Gizem Uzuner & Andrew Alola Adewale

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  1. Gizem Uzuner
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  2. Andrew Alola Adewale
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Correspondence to Gizem Uzuner.

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Responsible editor: Muhammad Shahbaz

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Appendix

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Table 6 Trend of house prices index and agricultural land availability in selected EU countries
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Uzuner, G., Adewale, A.A. Does asymmetric nexus exist between agricultural land and the housing market? Evidence from non-linear ARDL approach. Environ Sci Pollut Res 26, 7677–7687 (2019). https://doi.org/10.1007/s11356-019-04211-4

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