Apergis, NicholasSimo-Kengne, Beatrice DesireeGupta, RanganChang, Tsangyao2016-02-162015-10Nicholas Apergis, Beatrice D. Simo-Kengne, Rangan Gupta & Tsangyao Chang (2015) The dynamic relationship between house prices and output: evidence from US metropolitan areas, International Journal of Strategic Property Management, 19:4, 336-345, DOI:10.3846/1648715X.2015.1072857.1648-715X (print)1648-9179 (online)10.3846/1648715X.2015.1072857http://hdl.handle.net/2263/51402This paper investigates the long-run and short-term dynamics of 351 US metropolitan statistical area housing prices in relation to personal income. We apply a panel cointegration approach on annual data from 1993 to 2011 and find a long-run relationship between local house prices and per capita personal income. The causal direction is then assessed based on an autoregressive distributed lag specification that also accommodates for error-correction. Results from Granger-causality tests reveal the existence of a bi-directional causality between real house prices and real per capita personal income over both long- and short-horizons. We conclude that changes in personal income can predict house price movements and vice versa.en© 2015 Vilnius Gediminas Technical University (VGTU) Press. This is an electronic version of an article published in International Journal of Strategic Property Management, vol.19, no. 4, pp. 336-345, 2015. doi : 10.3846/1648715X.2015.1072857. International Journal of Strategic Property Management is available online at : http://www.tandfonline.comloi/tspm2 .Real house pricesReal personal income per capitaPanel cointegrationPanel causalityPostprint Article