An Empirical Analysis of the Role of Residential Real Estate Investment in the Economic Development of the Northeast Region of the United States.

摘要

Residential real estate investment has been recognized as an agent of economic development since the 1970s because residential real estate investment is a major economic activity with large multiplier effects. Residential real estate improvement is also linked to many external social and economic benefits. Previous studies have examined the role of residential real estate in economic development through approaches such as the effects of employment and income, household saving, labor productivity, health productivity and growth from real estate investment, as well as home ownership effects. However, recent discussions about the relationships between residential real estate investment and economic development include whether a change in residential real estate investment affects economic development of one region or also affects other neighboring regions. The main objective of this research is to estimate the impacts of residential real estate investment on the economic development of the Northeast region of the United States using a simultaneous equations 3SLS regression, and a spatial Durbin model with a spatial panel data set.;This research analyzes the relationship between residential real estate investment and economic development represented by changes in population, employment, median income, and median housing value. The interdependency among the explanatory variables is estimated by employing a system of simultaneous equations. County-level data from the U.S. Census Bureau for the period of 1980 to 2010 are used in this non-spatial model. Empirical results are expected to show whether changes in residential real estate investment can be used as a leading indicator to forecast changes in population, employment, or income in the county.;Spatial dependence is an important factor in regional economic development analysis, especially in terms of population, employment, and median income. Location is an inherent part of residential real estate, even at the county level, real estate exhibits spatial dependence. Counties that are neighbors are more alike than counties that are spatially far apart. Because of the potential for spatial dependence, this study also uses a spatial panel method to analyze the relationship between residential real estate investment and economic development represented by changes in population, employment, and median income by including spatial dependency.;This research contributes to the housing literature by investigating the simultaneous interaction of population, employment, income, and residential real estate investment decisions. This research also extends existing studies by utilizing a panel spatial Durbin model to investigate the spatial autocorrelation associated with real estate investment decisions. Spatial autocorrelation is shown to exist, and future regional development policies must account for the development policies of neighboring locations. To stimulate regional economic development, policy makers may need to have accumulated information available to ascertain whether they should pursue policies to influence the location and utility decisions of firms or people.