International Economics

<< N°159

Issue Q3 2019  
Does inequality really matter in forecasting real housing returns of the United Kingdom?  
Hossein Hassani
Mohammad Reza Yeganegi
Rangan Gupta
In this paper, we analyze the potential role of growth in inequality for forecasting real housing returns of the United Kingdom. In our forecasting exercise, we use linear and nonlinear models, as well as measures of absolute and relative consumption and income inequalities at quarterly frequency over the period 1975–2016. Our results indicate that, while nonlinearity in the data generating process of real housing returns is important, growth in inequality does not necessarily carry important information in forecasting the future path of housing prices in the United Kingdom. Abstract

Income and consumption inequalities ; Real housing returns ; Forecasting ; United Kingdom ; Keywords
C1 ; C4 ; C5 ; JEL classification
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