Modelling housing market fundamentals and the response to economic and political events: empirical evidence from Kuwait
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 10 August 2021
Issue publication date: 17 June 2022
Abstract
Purpose
The purpose of this paper is to examine the sensitivity of the Kuwait housing market to major local and regional geo-political and economic events.
Design/methodology/approach
This paper examines the market dynamics of the housing market in Kuwait. Kuwait provides an interesting market to consider owing to its position as a major oil producer, its sensitivity to geo-political events and its unusual demographic characteristics.
Findings
The error-correction model highlights that market is relatively volatile, with evidence of mean-reverting behaviour. Only when the data is smoothed are their more consistent findings with respect to underlying fundamentals. This paper also examines the response of the market to seven regional and local events. Of particular interest is that the one event that results in a consistent significant response is domestic legislation directly concerned with housing. This has a far greater impact than local or regional geo-political events.
Originality/value
Very few papers have considered how economic and political shocks directly impact housing markets using an event study approach. Given its geographic location and also its economic dependence on oil, Kuwait is an interesting market to consider.
Keywords
Citation
Alfalah, A., D’Arcy, E., Heinig, S. and Stevenson, S. (2022), "Modelling housing market fundamentals and the response to economic and political events: empirical evidence from Kuwait", International Journal of Housing Markets and Analysis, Vol. 15 No. 4, pp. 736-761. https://doi.org/10.1108/IJHMA-01-2021-0011
Publisher
:Emerald Publishing Limited
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