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Table 3 Error-correction model results for residential real estate development

From: On real estate development activity: the relationship between commercial and residential real estate markets

  Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
Pooled Offices Amsterdam Rotterdam Utrecht Netherlands
Panel A: Long–run model
\(\hbox {Ln}(\hbox {C}_{\mathrm{jt}}^c )\) 0.35 *** 0.18 *** 0.15 0.60 *** 0.36 ** 0.53 **
(0.08) (0.04) (0.13) (0.12) (0.15) (0.21)
\(\hbox {Ln}(GDP_t )\) 0.70 *** 0.75 *** 0.99 ** 0.38 0.65 * 0.36
(0.21) (0.21) (0.38) (0.34) (0.31) (0.27)
Constant -0.07 0.90 -0.54 0.55 0.30 2.19
(1.31) (1.27) (2.45) (2.10) (1.99) (2.13)
N 69 69 23 23 23 23
R2 –adj. 0.28 0.25 0.19 0.51 0.26 0.26
Panel B: Short-run model
\(\Delta \hbox {Ln}(\hbox {C}_{\mathrm{jt}}^c )\) 0.19 ** 0.06 0.07 0.31** 0.28 ** -0.03
(0.08) (0.04) (0.16) (0.14) (0.12) (0.36)
\(\Delta \hbox {Ln}(GDP_t )\) 4.00 *** 4.18 *** 4.48 * 5.04 ** 4.14 ** 3.28 *
(1.16) (1.14) (2.53) (1.93) (1.69) (1.89)
Error-correction term(t-1) -0.36 *** -0.31 ** -0.47 * -0.73 ** -0.38 -0.03
(0.13) (0.14) (0.25) (0.25) (0.29) (0.26)
Constant -0.07 * -0.09 * -0.09 -0.09 -0.08 -0.08
(0.05) (0.05) (0.08) (0.05) (0.05) (0.06)
N 66 66 22 22 22 22
R2–adj. 0.30 0.26 0.22 0.33 0.33 0.13
  1. Notes: This table presents the estimation results for the two-stage error-correction model approach to residential real estate development in the Amsterdam, Rotterdam and Utrecht regions. Panel A tests a long-run model with \(lnC_{jt}^r =\gamma _0 +\gamma _1 lnC_{jt}^c +\gamma _2 lnGDP_t +u_{jt} \) and is treated as a cross-sectional fixed effects model. Panel B tests a short-run correction model with \(\Delta ~\hbox {ln }C_{jt}^r =\alpha _0 +\alpha _1 \Delta \hbox {ln }C_{jt}^c +\alpha _2 \Delta \hbox {ln}GDP_t +\alpha _3 u_{jt-1} +\varepsilon _{jt} \) and is treated as a cross-sectional random effects model. The dependent variable is log (residential real estate development). Model 1 shows the estimates for the panel data, and model 2 for the office-only commercial real estate investments. Model 3 shows the region-specific outcomes for Amsterdam, model 4 for Rotterdam and model 5 for Utrecht,. Model 6 shows the outcome of a macro-level robustness test for the Netherlands. \(C_{jt}^c \) denotes commercial real estate development, and \(GDP_t\) the Gross Domestic Product (€ million). Standard errors are provided between brackets. Significance at the 1%, 5% and 10% levels are denoted by ***, ** and * respectively