DEMOGRAPHIC STRUCTURE AND HOUSE PRICES IN THE UNITED STATES: RECONCILIATION USING METROPOLITAN AREA DATA*

Abstract

We apply a semiparametric approach to 19 metropolitan areas in the US to relate normalized house prices to the age distribution within each area. We find that, although the elderly population has a negative impact on house prices in most areas, the shape of the estimated age response function differs between areas. We further find via probit and logit regressions that the age-response function is more likely to become inverted U-shaped as the population of an area becomes more aged, which is also suggestive of the negative impact of aging. These results indicate that the impact of the elderly population becomes more negative as the population ages. © 2022, Journal of Economic Development. All Rights Reserved.