We explore the impact of regulatory supply constraints on house price levels following boom and bust periods in London. We hypothesize that when regulatory restrictiveness increases during a boom period, house prices will be higher in the following year compared to house prices in less restricted areas. We also hypothesize that when regulatory restrictiveness increases during a bust period, house prices will be lower in the following year compared to house prices in less restricted areas. We empirically test our hypothesis using a multilevel mixed-effects model with a panel data set of 32 boroughs of London, ranging from 2001 to 2013. Our analysis reveals that our hypothesis holds true. A borough with a strict planning authority will have higher house prices following a boom period and lower house prices following a bust period compared to prices in a borough with a more lenient planning authority.
Level of Honors
magna cum laude
Jonathan Lhost and Merton Finkler
Armstrong, Elizabeth P., "A Royal Problem: Planning Induced Supply Constraints in London" (2015). Lawrence University Honors Projects. Paper 80.