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COVID-19, state of emergency, and housing market

Delgado Narro, Augusto Ricardo and Katafuchi, Yuya (2020): COVID-19, state of emergency, and housing market.

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Abstract

This study analyzes how the declaration of a state of emergency stemming from COVID-19 affected long-term consumer behavior, i.e., real estate purchasing activity. For our analysis, we define the earliest event that a state of emergency was declared as a treatment and monthly macro data on the real estate market at the county level as an outcome, and construct a panel dataset with various covariates. Using the dataset, we estimated the treatment effect using a difference-in-differences model and found the following; first, the emergency declarations issued by a government do not appear to have affected long-term consumption behavior. Second, this lack of effect remains after excluding various control variables or using a continuous treatment variable.

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