The high social costs of financial crises imply that economists, policymakers, businesses, and households have a tremendous incentive to understand, and try to prevent them. And yet, so far we have ...failed to learn how to avoid them. In this article, we take a novel approach to studying financial crises. We first build ten case studies of financial crises that stretch over two millennia, and then consider their salient points of differences and commonalities. We see this as the beginning of developing a useful taxonomy of crises – an understanding of the most important factors that reappear across the many examples, which also allows (as in any taxonomy) some examples to be more similar to each other than others. From the perspective of our review of the ten crises, we consider the question of why it has proven so difficult to learn from past crises to avoid future ones.
The main aim of the article was to determine the factors influencing the unit prices of agricultural real estate on the outskirts of an urban agglomeration (Szczecin, Poland). The impact of the ...variables available in the database was determined on the basis of an econometric model with interactions between explanatory variables. The database contains information on 54 agricultural real estate transactions. The analysis period covers the years 2017-2022. Based on the estimated econometric models, it can be concluded that the real estate unit prices depend on their area, distance from the city borders, real estate surroundings as well as time and location. Interactions between distance from the city borders and surroundings and time (year of transaction) are also statistically significant. Presented models might assist expert systems supporting private investments as well as many type of public policies.
Real estate prices and bank stability Koetter, Michael; Poghosyan, Tigran
Journal of banking & finance,
06/2010, Volume:
34, Issue:
6
Journal Article
Peer reviewed
Real estate prices can deviate from their fundamental value due to rigid supply, heterogeneity in quality, and various market imperfections, which have two contrasting effects on bank stability. ...Higher prices increase the value of collateral and net wealth of borrowers and thus reduce the likelihood of credit defaults. In contrast, persistent deviations from fundamentals may foster the adverse selection of increasingly risky creditors by banks seeking to expand their loan portfolios, which increases bank distress probabilities. We test these hypotheses using unique data on real estate markets and banks in Germany. House price deviations contribute to bank instability, but nominal house price developments do not. This finding corroborates the importance of deviations from the fundamental value of real estate, rather than just price levels or changes alone, when assessing bank stability.
We provide evidence that changes in lender optimism can lead to excessive fluctuations in credit spreads across the credit cycle. Using data on the real estate properties of loan officers originating ...large corporate loans, we find that credit spreads overreact to sophisticated lenders’ recent local economic experiences, captured by local housing price growth. These effects are only present when borrowers own real estate assets and during times of greater uncertainty about real estate values, i.e., boom-and-bust cycles in housing prices. Our analysis suggests that recent personal experiences shape sophisticated lenders’ beliefs about real estate values, which affect their pricing decisions.
Empirical evidence supports the hypothesis that greater accessibility to opportunities can have a positive impact on real estate values. However, this capitalisation of the benefits of accessibility ...could vary between different study areas. This research estimates hedonic and spatial hedonic models in two urban areas to compare if differences can be found in the impact accessibility using public transport has on residential property values. The two study areas chosen for comparison are a medium sized city without any major mobility problems (Santander, Spain) and a very large city with major congestion problems (Rome, Italy). The estimated hedonic models have considered the possible presence of spatial effects, a common occurrence with real estate data which may generate dependency in the residuals of hedonic models. Accessibility has been measured using two types of indicators: relative and gravity based. The results confirm that accessibility was a positive factor on property prices in both cities, although in Santander this was only true using the relative indicator to the city centre. These results are relevant for supporting the introduction of value capture policies which provide finance for new projects to extend and encourage greater use of public transport.
•No appropriate social evaluation method for cycling infrastructure projects is currently available in Latin America at. This research attempts to provide some evidence for this by estimating a novel ...non-linear hedonic model.•We formulated and estimated a hedonic model, including a new functional form, allowing us to represent the effect of amenities in property prices in a continuous fashion, reaching a maximum at a point not adjacent to it.•The model was validated using an independent sample. Results show statistically significant effects for most amenities considered in the property price, suggesting that consideration of such impacts through hedonic prices could be incorporated into the social evaluation tool-kit.•In particular, we found a statistically significant effect of cycleways in property values, advancing in the quest to incorporate monetary values for social evaluation.•We also offer a methodology to estimate the benefits of a new cycleway projects through a simple equation that only needs the initial value of properties in its area of influence and the distance to the closest cycleway before and after the project.
Cycling has experienced a significant increase in several parts of the world, partly due to a general interest towards sustainable mobility. Chile is not an exception, and cycling has grown steadily in recent decades. However, we do not have an appropriate social evaluation method for cycling infrastructure projects, as they may imply a higher travel time than trips by other modes, and there is no consideration of the health and environmental benefits that cycling implies. To advance on this issue, we built a georeferenced databank about diverse urban amenities, including cycleways, Metro lines, urban highways, schools and parks, in the vicinity of a set of selected properties. With this data, we formulated and estimated a non-linear hedonic model, incorporating a functional form that allowed us to represent the effect of amenities in a continuous fashion, reaching a maximum at a certain distance from the property and not adjacent to it. The model was also validated using an independent sample. Our results show a substantial and statistically significant effect of cycleways in property prices (and also of other amenities included to control for their effects). As such, we suggest that their consideration could be incorporated in the social evaluation tool-kit and even be used by real estate developers as an ancillary tool for deciding new project locations.
The main goal of this paper was to explore the use of an artificial neural network (ANN) model in predicting real estate prices in the Middle East market. Although conventional modeling approaches ...such as regression can be used in prediction, they have a weakness of a predetermined relationship between input and output. In this regard, using the ANN model was expected to reduce the bias and ensure non-linear relationships are also covered in the prediction process for more accurate results. The ANN model was created using Python v.3.10 program. The model exhibited a high correlation between predicted and actual house price data (R=0.658). In this respect, it was realized that the model could be effectively used in appraising real estate by investors. However, a major limitation of the model was realized to be a limited dataset for large and luxurious houses, which were not accurately predicted as data distribution between actual and predicted values became sparse for high house prices. A key recommendation made is that future research should include more variables related to luxurious houses and macroeconomic factors to increase the ANN model accuracy.
The paper analyzes the mechanism of real estate prices on economic development with panel quantile regression model. It is found that real estate prices can significantly promote economic ...development. Generally speaking, the contribution of real estate prices to economic development in regions with higher level of economic development is higher than that in regions with lower level. With the continuous improvement of the quantile, the impact of real estate prices has generally increased gradually, and the impact of urbanization level basically shows the law of diminishing marginal effect.
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