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| LEADER |
01347nam a2200229Ia 4500 |
| 001 |
10.1086-701422 |
| 008 |
220511s2019 CNT 000 0 und d |
| 020 |
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|a 00223808 (ISSN)
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| 245 |
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|a House prices, local demand, and retail prices
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| 260 |
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|b University of Chicago Press
|c 2019
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| 856 |
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|z View Fulltext in Publisher
|u https://doi.org/10.1086/701422
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|a We document a causal response of local retail prices to changes in local house prices, with elasticities of 15–20 percent across housing cycles. These price responses are largest in zip codes with many homeowners and are driven by changes in markups rather than local costs. We argue that markups rise with house prices because greater housing wealth reduces homeowners’ demand elasticity, and firms raise markups in response. Shopping data confirm that house price changes affect the price sensitivity of homeowners, but not that of renters. Our evidence suggests a new source of business cycle markup variation. © 2019 by The University of Chicago. All rights reserved.
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| 650 |
0 |
4 |
|a business cycle
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| 650 |
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4 |
|a demand analysis
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| 650 |
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4 |
|a homeowner
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| 650 |
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4 |
|a housing market
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| 650 |
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4 |
|a price determination
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| 650 |
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4 |
|a price dynamics
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| 650 |
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4 |
|a retailing
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| 700 |
1 |
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|a Stroebel, J.
|e author
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|a Vavra, J.
|e author
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| 773 |
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|t Journal of Political Economy
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