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This study examined the price spillover effect of housing submarkets in cities in the Seoul metropolitan area in South Korea by using the Granger causality test and vector autoregressive model (VAR). We found that housing prices showed a higher spillover effect within regions with similar housing market characteristics. Additionally, the spatial spillover of housing prices revealed a difference between sales price and jeonse price. The spillover of jeonse price was characterized by mutual influence among neighboring cities, while that of sales price was characterized by the influence being transferred in one direction hierarchically. Furthermore, the effects of housing price indicated a slight difference between sales price and jeonse price. Although jeonse price was mainly affected by a neighboring area (geographic boundary), sales price was more influenced by the city with the highest housing prices. Lastly, the housing price spillover tended to be expansive around the city with the highest price. These results suggest that housing price policies targeting specific regions or areas in Korea must be differentiated according to the type of occupancy (jeonse or sales), and it is essential to consider the externalities when promoting policies in the housing market wherein externalities may be significant.
Leeyoung Kim; Wonseok Seo. Micro-Analysis of Price Spillover Effect among Regional Housing Submarkets in Korea: Evidence from the Seoul Metropolitan Area. Land 2021, 10, 879 .
AMA StyleLeeyoung Kim, Wonseok Seo. Micro-Analysis of Price Spillover Effect among Regional Housing Submarkets in Korea: Evidence from the Seoul Metropolitan Area. Land. 2021; 10 (8):879.
Chicago/Turabian StyleLeeyoung Kim; Wonseok Seo. 2021. "Micro-Analysis of Price Spillover Effect among Regional Housing Submarkets in Korea: Evidence from the Seoul Metropolitan Area." Land 10, no. 8: 879.
This study examined the relationship between housing markets and residential migration to identify if there is a housing refugee phenomenon due to an involuntary ripple effect in the Seoul metropolitan area, South Korea. The study applied Granger causality analysis and a vector error correction model. The empirical results confirmed that changes in housing market conditions cause a ripple effect in surrounding areas in the Seoul metropolitan area, and these changes are easily transmitted to the nearby Gyeonggi housing market. This study shows that intra-metropolitan residential migration may occur due to changes in housing market conditions. Additionally, the study proved that residential migration from Seoul to the nearby Gyeonggi province does not represent the pursuit of a stable residential environment, but is merely involuntary migration due to the financial burden of increased housing costs in Seoul. Finally, the study showed that there may be a ripple effect that intensifies instability in the jeonse market—a type of lease unique to South Korea—that emerged due to residential migration from Seoul. From this perspective, this study confirms that residential migration occurring in the Seoul metropolitan area is the result of an involuntary ripple effect and represents a housing refugee phenomenon.
Wonseok Seo; Leeyoung Kim. Investigating the Ripple Effect through the Relationship between Housing Markets and Residential Migration in Seoul, South Korea. Sustainability 2020, 12, 1225 .
AMA StyleWonseok Seo, Leeyoung Kim. Investigating the Ripple Effect through the Relationship between Housing Markets and Residential Migration in Seoul, South Korea. Sustainability. 2020; 12 (3):1225.
Chicago/Turabian StyleWonseok Seo; Leeyoung Kim. 2020. "Investigating the Ripple Effect through the Relationship between Housing Markets and Residential Migration in Seoul, South Korea." Sustainability 12, no. 3: 1225.