Cooling Measures and Housing Wealth: Evidence from Singapore

44 Pages Posted: 14 Oct 2019 Last revised: 26 Aug 2021

See all articles by Wolfgang Karl Härdle

Wolfgang Karl Härdle

Blockchain Research Center Humboldt-Universität zu Berlin; Charles University; National Yang Ming Chiao Tung University; Asian Competitiveness Institute

Rainer Schulz

University of Aberdeen - Health Economics Research Unit

Taojun Xie

National University of Singapore (NUS) - Asia Competitiveness Institute

Date Written: October 3, 2019

Abstract

Excessive house price growth was at the heart of the financial crisis in 2007/08. Since then, many countries have added cooling measures to their regulatory frameworks. It has been found that these measures can indeed control price growth, but no one has examined whether this has adverse consequences for the housing wealth distribution. We examine this for Singapore, which started in 2009 to target price growth over ten rounds in total. We find that welfare from housing wealth in the last round might not be higher than before 2009. This depends on the deflator used to convert nominal into real prices. Irrespective of the deflator, we can reject that welfare increased monotonically over the different rounds.

Keywords: house price distribution, stochastic dominance tests

JEL Classification: R31, C31, C55

Suggested Citation

Härdle, Wolfgang Karl and Schulz, Rainer and Xie, Taojun, Cooling Measures and Housing Wealth: Evidence from Singapore (October 3, 2019). Available at SSRN: https://ssrn.com/abstract=3463566 or http://dx.doi.org/10.2139/ssrn.3463566

Wolfgang Karl Härdle

Blockchain Research Center Humboldt-Universität zu Berlin ( email )

Unter den Linden 6
Berlin, D-10099
Germany

Charles University ( email )

Celetná 13
Dept Math Physics
Praha 1, 116 36
Czech Republic

National Yang Ming Chiao Tung University ( email )

No. 1001, Daxue Rd. East Dist.
Hsinchu City 300093
Taiwan

Asian Competitiveness Institute ( email )

Singapore

Rainer Schulz

University of Aberdeen - Health Economics Research Unit ( email )

Taojun Xie (Contact Author)

National University of Singapore (NUS) - Asia Competitiveness Institute ( email )

469C Bukit Timah Road
Level 3, Wing A
259772
Singapore

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