Dynamics of the US Housing Market: A Quantal Response Statistical Equilibrium Approach
In this article, we demonstrate that a quantal response statistical equilibrium approach to the US housing market with the help of the maximum entropy method of modeling is a powerful way of revealing different characteristics of the housing market behavior before, during and after the recent housin...
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doaj-5ce7332a1901491fa4b4cfbdfcc66c192020-11-24T22:03:18ZengMDPI AGEntropy1099-43002018-10-01201183110.3390/e20110831e20110831Dynamics of the US Housing Market: A Quantal Response Statistical Equilibrium ApproachÖzlem Ömer0Department of Economics, The New School for Social Research, 6 E 16th Street, New York, NY 10011, USAIn this article, we demonstrate that a quantal response statistical equilibrium approach to the US housing market with the help of the maximum entropy method of modeling is a powerful way of revealing different characteristics of the housing market behavior before, during and after the recent housing market crash in the US. In this line, a maximum entropy approach to quantal response statistical equilibrium model (QRSE) is employed in order to model housing market dynamics in different phases of the most recent housing market cycle using the S&P Case Shiller housing price index for 20 largest- Metropolitan Regions, and Freddie Mac housing price index (FMHPI) for 367 Metropolitan Cities for the US between 2000 and 2015. Estimated model parameters provide an alternative way to understand and explain the behaviors of economic agents, and market dynamics by questioning the traditional economic theory, which takes assumption for the behavior of rational utility maximizing representative agent with self-fulfilled expectations as given.https://www.mdpi.com/1099-4300/20/11/831housing market crashstatistical equilibriumquantal responseinformational entropythe maximum entropy method |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Özlem Ömer |
spellingShingle |
Özlem Ömer Dynamics of the US Housing Market: A Quantal Response Statistical Equilibrium Approach Entropy housing market crash statistical equilibrium quantal response informational entropy the maximum entropy method |
author_facet |
Özlem Ömer |
author_sort |
Özlem Ömer |
title |
Dynamics of the US Housing Market: A Quantal Response Statistical Equilibrium Approach |
title_short |
Dynamics of the US Housing Market: A Quantal Response Statistical Equilibrium Approach |
title_full |
Dynamics of the US Housing Market: A Quantal Response Statistical Equilibrium Approach |
title_fullStr |
Dynamics of the US Housing Market: A Quantal Response Statistical Equilibrium Approach |
title_full_unstemmed |
Dynamics of the US Housing Market: A Quantal Response Statistical Equilibrium Approach |
title_sort |
dynamics of the us housing market: a quantal response statistical equilibrium approach |
publisher |
MDPI AG |
series |
Entropy |
issn |
1099-4300 |
publishDate |
2018-10-01 |
description |
In this article, we demonstrate that a quantal response statistical equilibrium approach to the US housing market with the help of the maximum entropy method of modeling is a powerful way of revealing different characteristics of the housing market behavior before, during and after the recent housing market crash in the US. In this line, a maximum entropy approach to quantal response statistical equilibrium model (QRSE) is employed in order to model housing market dynamics in different phases of the most recent housing market cycle using the S&P Case Shiller housing price index for 20 largest- Metropolitan Regions, and Freddie Mac housing price index (FMHPI) for 367 Metropolitan Cities for the US between 2000 and 2015. Estimated model parameters provide an alternative way to understand and explain the behaviors of economic agents, and market dynamics by questioning the traditional economic theory, which takes assumption for the behavior of rational utility maximizing representative agent with self-fulfilled expectations as given. |
topic |
housing market crash statistical equilibrium quantal response informational entropy the maximum entropy method |
url |
https://www.mdpi.com/1099-4300/20/11/831 |
work_keys_str_mv |
AT ozlemomer dynamicsoftheushousingmarketaquantalresponsestatisticalequilibriumapproach |
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1725832202524033024 |