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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Main Author: Özlem Ömer
Format: Article
Language:English
Published: MDPI AG 2018-10-01
Series:Entropy
Subjects:
Online Access:https://www.mdpi.com/1099-4300/20/11/831
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spelling 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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