1999/11/01 by Geoffrey Meen
Economics, Econometrics and Finance · #Housing Market and Economics #Regional Economics and Spatial Analysis #Spatial and Panel Data Analysis
paper · doi:10.1080/02673039982524
openalex publication_date 1999/11/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/30
In Britain, house prices exhibit a distinct spatial pattern over time, rising first in a cyclical upswing in the south-east and, then, spreading out over the rest of the country. This is known as the ripple effect. Although previous studies have shown that, statistically, the ripple effect is a valid representation of the data, providing convincing economic explanations is less straightforward. Some studies have concentrated on the role of migration; others argue that the pattern reflects different regional growth rates. This paper suggests that structural differences in regional housing markets are important. A new model of house prices for the regions in Great Britain is devised and estimated in which the coefficients exhibit non-random spatial patterns. The coefficients reflect structural differences between the regions and it is shown, through simulations, that the model can generate a ripple effect irrespective of regional growth patterns.