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Research Seminars & Workshops @ IRES


The spatial impact of employment centres on housing markets

Dr Nikodem Szumilo
University of Cambridge

Date: 27 October (Thursday)
Time: 4.00pm - 5.30pm
Venue: RMI Executive Seminar Room
Chair: A/P Sing Tien Foo

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Abstract
The rapid growth of house prices in many fast-growing economic regions has proven difficult to explain by existing economic theories. Large scale models have proven especially difficult to apply to explain pricing differences between micro-locations. This research provides a model of spatial and temporal interactions between housing and employment markets and applies it to the example of Cambridge, UK. The results show that rapid growth of employment centres increases house prices in neighbouring locations even after adjusting for income, employment or macroeconomic conditions. It appears that by clustering together in large employment centres companies are able to create value to their employees at no additional direct cost to themselves. While it is unclear what exactly is the source of this value the effect appears to allow businesses to hire employees at below the wage rate which would be dictated by a parity of disable income.

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