• International Area Studies Review
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• v.12 no.3
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• pp.49-67
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• 2008

In this paper, we address the problem of optimal monetary policy rule in the presence of abrupt shifts in the structure of the economy. To do so, we first estimate a Markov switching model for the US housing price inflation, and find evidence supporting the presence of two distinct regimes for the US housing price inflation. One of the two regimes identified appears 'usual', in that housing price inflation negatively responds to higher real interest rate. The other regime is 'unusual', in that the housing price inflation is positively related with real interest rate. We then solve an optimal control problem of the FRB under the presence of the two regimes thus identified. The optimal policy is 'asymmetric' in that the optimal responses in the 'usual' regime require the FRB to lean against the wind to inflationary pressure, while the FRB is recommended to accommodate it in the unusual regime. It is also found that the optimal degree of responses is more conservative when the FRB acknowledges the uncertainty about future regime.

• Land and Housing Review
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• v.4 no.1
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• pp.43-54
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• 2013

This This paper investigates the variation of the factors to determinate housing price in Seoul metropolitan area after sub-prime financial crisis, in Korea, using a VAR model. The model includes housing price and housing rent (Jeonse) in Seoul metropolitan area from 1999 to 2011, and uses interest rate, real GDP, KOSPI, Producer Price Index and practices to impulse response and variance decomposition analysis to grasp the dynamic relation between a variable of macro economy and and a variable of housing price. Data is classified to 2 groups before and after the 3rd quater of 2008, when sub-prime crisis occurred; one is from the 1st quater of 1999 to the 3rd quater of 2008, and the other is from the 2nd quater of 1999 and the 4th quater of 2011. As a result, comparing before and after sub-prime crisis, housing price is more influenced by its own variation or Jeonse price's variation instead of interest rate and KOSPI. Both before and after sub-prime financial crisis, Jeonse price is also influenced by its own variation and housing price. While after sub-prime financial crisis, influences of Producer Price Index, KOSPI and interest rate were weakened, influence of real GDP is expanded. As housing price and housing rent are more influenced by real economy factors such as GDP, its own variation than before sub-prime financial crisis, the recent trend that the house prices is declined is difficult to be converted, considering domestic economic recession and uncertainty, continued by Europe financial crisis. In the future to activate the housing business, it ia necessary to promote purchasing power rather than relaxation of financial and supply regulation.

• Korean Journal of Construction Engineering and Management
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• v.7 no.5
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• pp.115-127
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• 2006

Although the Korean government have made a plan of housing market with supply and concentrated on the welfare of the people, there are still a lot of problem in housing market for lack of a long-term vision and consistent policy of the government. The plan of 115% of housing diffusion in 2012 is in progress after its acquisition of 100% in 2002, but there are no changes in the rental housing rate of 43% in 2003. In addition, there are getting worse circumstances in the instability of housing market and the low-income bracket, because of the Korean construction firms' bankruptcy with an increase of unsold hosing and a rapid increase of housing prices. The government have made the strategy of revitalizing the economy and regional development by means of a million public rental housing plan for the low-income bracket and welfare. This paper introduces the basic information of the subjective strategy establishment with the analysis of the reciprocal action of influence factors for public rental housing by system dynamics theory and the effect of public rental housing in housing supply market which has a long-term dynamic form.

• Journal of Environmental Science International
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• v.4 no.3
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• pp.153-167
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• 1995

Recycling is receiving increasing social attention today as our nation begins to grapple with the significant problems caused by huge amount of municipal solid waste. The topic of recycling is not simple but extremely complicated. This study attempts to provide basic data and policy options for expanding and improving separated collection and recycling in public residential areas, through three case study of apartment housing areas in Taegu Metropolitan City. The main results of this study are summarized as follows. For the significant period of time, all three case areas had in common the extreme difficulty in establishing and operating the system of connecting public participation, collection and storage, transportation, and actual recycling of materials because of a variety of problems involved in this process. Both amounts of and prices for collected materials fluctuated considerably over time mainly due to monthly changes in recyclable home materials and the dynamic nature of recycling markets. Public questionnaire survey revealed the very high level of participation in separated collection, not only because almost all respondents well understood the necessity and importance of recycling, but because they also knew how to do separated collection. But overall activities were rated low and most respondents suggested the enlargement of public participation, the improvement of collection and storage facilities, and collection transportation networks. In particular, most respondents had little experience of using recycled Products and used mainly reproduced soap and bathroom tissue. Furthermore, they were considerably unsatisfied with low variety and quality of recycled products, their high prices and low availability in the market. Finally potential policy options and activities for improving separated collection and recycling are suggested.

• Korea Real Estate Review
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• v.28 no.3
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• pp.65-77
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• 2018

The purpose of this study is to analyze the effect of the educational environment on the prices of studio apartments, known as officetels, in Korea. Since the revision of relevant laws in 2010, they have served as substitutes for residential purposes in areas suffering from housing shortage, especially where the educational environment is a significant factor. To assess the relation between the educational environment and rental rates, the hedonic price model and artificial neural networks were implemented. The national assessment of the academic performance of middle and high schools that were closest to each officetel, and the ratio of students going to special-purpose schools and private high schools were considered as independent variables. Research findings indicated that the positive effect of the dependent variable increased as the value of educational environment-related variables increased. This result could be utilized as a functional index for housing providers after considering educational environments.

• Asia-Pacific Journal of Business
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• v.14 no.2
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• pp.51-61
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• 2023

Purpose - Since COVID-19, the government's expansion of liquidity to stimulate the economy has resulted in an increase in private debt and an increase in asset prices of such as real estate and stocks. The recent sharp rise of the US Federal fund rate and tapering by the Fed have led to a fast rise in domestic interest rates, putting a heavy burden on the Korean economy, where the level of household debt is very high. Excessive household debt might have negative effects on the economy, such as shrinking consumption, economic recession, and deepening economic inequality. Therefore, now more than ever, it is necessary to identify the causes of the increase in household debt. Design/methodology/approach - Main methodology is regression analysis. Dependent variable is household loans from depository institutions. Independent variables are consumer price index, unemployment rate, household loan interest rate, housing sales price index, and composite stock price index. The sample periods are from 2017 to May 2022, comprising 72 months of data. The comparative analysis period before and after COVID-19 is from January 2017 to December 2019 for the pre-COVID-19 period, and from Jan 2020 to December 2022 for the post-COVID-19 period. Findings - Looking at the results of the regression analysis for the entire period, it was found that increases in the consumer price index, unemployment rate, and household loan interest rates decrease household loans, while increases in the housing sales price index increase household loans. Research implications or Originality - Household loans of depository institutions are mainly made up of high-credit and high-income borrowers with good repayment ability, so the risk of the financial system is low. As household loans are closely linked to the real estate market, the risk of household loan defaults may increase if real estate prices fall sharply.

• Land and Housing Review
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• v.15 no.3
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• pp.45-59
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• 2024

Land reservation policies are twofold: Land Banking and Reserved National Lands. The former purchases land for public development before prices rise and controls supply and demand. The latter reserves land for future administrative needs. Both systems aim to reserve land for future supply if prices increase. However, these policies lack responses to contemporary environmental changes, such as the carbon-neutral society and development-restricted zones. This study proposes policy reform to preserve environmental value by evaluating land in metropolitan areas using six ecosystem service variables. Target areas are Gapyeong-gun, Pocheon-si, and Yeoncheon-gun in Gyeonggi Province. Short-term improvements include evaluating environmental value, mid-term measures involve adding environmental considerations to reservations, and long-term measures include expanding the Ministry of Economy and Finance's role in integrated management.

• KDI Journal of Economic Policy
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• v.32 no.4
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• pp.35-73
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• 2010

This paper examines consumption dynamics in relation to asset prices in Korea. Empirical analysis based on the error correction model shows that personal consumption is affected by changes in asset prices but the consumption converges to the long-run level of consumption corresponding to the total income flow in two years. This adjustment in consumption implies that the consumption error, reflected in the error correction term, should have predictability for the future consumption growth during the adjustment period. It is found that the error correction term has a long-run predictability for consumption over up to about 3 years; thus, confirming the error correction model. It is also found that housing prices have larger effects on consumption compared with stock prices in Korea. In addition, the effects of income and asset prices on consumption show bigger effects during contractionary period than expansionary period in business cycles. This paper also analyzes effects of asset wealth that reflects changes in both price and quantity. It is found that asset wealth has a long-run effect on consumption in addition to total income as determinants of consumption. Since wealth effects usually indicate the long-run effect of changes in asset wealth on consumption that is not explained by labor income, which is the proxy for human source of wealth, it is estimated with labor income used as a control variable. According to the estimation, the marginal propencity to consume out of asset wealth is approximately 2%. It means that 1,000won increase in asset wealth may lead to 20 won increase in consumption.

• Land and Housing Review
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• v.12 no.2
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• pp.33-45
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• 2021

Due to recent changes in government policy, officetels have received attention as alternative assets, along with the uplift of office and apartment prices in Seoul. However, the current officetel price indexes use small-size samples and, thus, there is a critique on their accuracy. They rely on valuation prices which lag the market trend and do not properly reflect the volatile nature of the property market, resulting in 'smoothing'. Therefore, the purpose of this paper is to create the officetel price index using transaction data. The data, provided by the Ministry of Land, Infrastructure and Transport from 2005 to 2020, includes sales prices and rental prices - Jeonsei and monthly rent (and their combinations). This study employed a repeat sales model for sales, jeonsei, and monthly rent indexes. It also contributes to improving conversion rates (between deposit and monthly rent) as a supplementary indicator. The main findings are as follows. First, the officetel price index and jeonsei index reached 132.5P and 163.9P, respectively, in Q4 2020 (1Q 2011=100.0P). However, the rent index was approximately below 100.0. Sales prices and jeonsei continued to rise due to high demand while monthly rent was largely unchanged due to vacancy risk. Second, the increase in the officetel sales price was lower than other housing types such as apartments and villas. Third, the employed approach has seen a potential to produce more reliable officetel price indexes reflecting high volatility compared to those indexes produced by other institutions, contributing to resolving 'smoothing'. As seen in the application in Seoul, this approach can enhance accuracy and, therefore, better assist market players to understand the market trend, which is much valuable under great uncertainties such as COVID-19 environments.

• Spatial Information Research
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• v.10 no.2
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• pp.215-232
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• 2002

Variables representing neighborhood quality should be included in hedonic price models to control lfor the influences of negative or positive externalities from the quality of neighborhood on urban housing prices. This study proposes a GIS-based method to effectively measure the neighborhood quality variable when data on the neighborhood quality are aggregated by census sub area. This study also tests the superiority of the proposed neighborhood quality variable created by intensive use of GIS operations to a neighborhood variable not based on GIS operations in explaining the housing price variations by using Seoul＇s apartment sales data. The results from this study show that the neighborhood quality variable based on GIS-based operations shows better performance in explaining the urban housing price variations in Seoul＇s housing market. The implication from the results is that the potentials of GIS-based spatial operations in creating neighborhood quality variables should be well acknowledged by the researchers in the area of urban housing market study and GIS-based spatial operations should be more actively applied to generate better neighborhood quality variables for hedonic price models.