Abstract
We argue that major changes in economic policy have resulted in a more market driven demand for housing investment in Sweden, due to policy changes at the end of the 1980s and the beginning of the 1990s. Tobin’s transparent Q theory is the investment theory used. For the last period of the sample (1993–2003 quarterly data), our results indicate that there exists a high degree of correlation between the Q ratio and the (logarithm of) two different variables for housing investment. An error correction regression model, controlling for structural breaks, also indicates that a stable long-run relationship could be detected for the logarithm of building starts and the Q ratio between 1993–2003, but not between 1981–1992.
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Berg, L., Berger, T. The Q Theory and the Swedish Housing Market—An Empirical Test. J Real Estate Finan Econ 33, 329–344 (2006). https://doi.org/10.1007/s11146-006-0336-1
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DOI: https://doi.org/10.1007/s11146-006-0336-1