Abstract: Using panels of housing purchase price and jeonse price, I investigate house price convergence in Korea. This study is to analyze mainly two important issues. First, I test whether the house prices are converging over time. For any type of the house prices, purchase price and jeonse price, I find there is little evidence of overall house price convergence. Next, I employ a clustering algorithm to examine the existence of a convergence club where the cross-sectional variation within a subgroup decreases over time. The results support that there is strong evidence of multiple convergence clubs. Despite the fact that national house purchase price and jeonse price share similar time-series properties, the club convergence results suggest that there exist differences in cross-sectional properties between purchase price and jeonse price.
Publication Year: 2011
Publication Date: 2011-04-01
Language: en
Type: article
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Cited By Count: 4
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