Hedging housing risk in the new economy: is there a connection, and should firms care?. (4th August 2014)

• Record Type: Journal Article
• Authors: Berg, Nathan
• Is Part Of: Global business & economics review. Volume 5:Number 1(2003)
• Page Start: 10
• Page End: 36
• Publication Date: 2014-08-04
• Subjects: hedging housing risk -- new economy firms -- house price dynamics -- house price indexes -- house values -- house price volatility -- house price insurance -- residential real estate markets; Economics -- Periodicals; International economic relations -- Periodicals; 330.5
• Languages: English
• ISSNs: 1097-4954

Abstract

This paper analyses housing price dynamics in and outside of Telecom Corridor, a region near Dallas, Texas, with a high concentration of new economy firms. Using separate home price indexes in and outside this region, the paper tests whether home values are more volatile in the new economy area and compares mean–variance efficient portfolio weights on housing. The problem of hedging housing price volatility appears to be more severe in the high tech sector, suggesting that new economy firms may benefit by offering workers various forms of home price insurance in lieu of cash wages.