Exchange rate pass-through to house rental prices. Evidence from the Buenos Aires’ semi-dollarized market
Abstract The relationship between the exchange rate and the consumer price index (CPI) has been extensively covered. However, aggregated approaches hinder the possibility of identifying specific features of this effect over different sectors of the economy, particularly regarding changes in relative...
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| Autores principales: | , |
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| Lenguaje: | English |
| Publicado: |
Universidad de Chile. Facultad de Arquitectura y Urbanismo. Instituto de la Vivienda
2020
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| Materias: | |
| Acceso en línea: | http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-83582020000200130 |
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| Sumario: | Abstract The relationship between the exchange rate and the consumer price index (CPI) has been extensively covered. However, aggregated approaches hinder the possibility of identifying specific features of this effect over different sectors of the economy, particularly regarding changes in relative prices. This paper aims to examine the dynamics of the rental housing market at a given shift in the exchange rate. We evaluate the case of the real estate market of Buenos Aires, due to its peculiar configuration: the coexistence of a highly dollarized sales segment and a market of housing rentals in which the operations are denominated in local currency. For this purpose, we carry out a two-step panel regression of spatially disaggregated offer rent prices to estimate the pass-through in a non-tradable market. The estimates show an exchange pass-through to rental prices exceeding 30%, more significant than we would have expected. |
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