PERCEPTION OF PUBLIC INSECURITY AND HOUSING PRICES IN MEXICO
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ABSTRACT
This paper evaluates the impact of the perception of public insecurity on housing prices in Mexico. To that end, two dynamic panel data models involving 27 Mexican cities are assembled. The first model corresponds to the pre-pandemic period, while the second to the pandemic period. The specification of the model is based on a supply- and demand-side approach, whereas its estimation relies on the Arellano-Bond technique to address endogeneity problems. The evidence is consistent in showing that: 1) Housing prices fall as the perception of public insecurity rises, and 2) higher construction costs and income levels raise home prices. Moreover, the provision of public infrastructure and the real mortgage interest rate generate demand- and supply-side effects, so the net effect of these two variables on housing prices is negative before the pandemic and positive during the pandemic. Finally, housing prices involve a strong inertial component.
PERCEPCIÓN DE INSEGURIDAD PÚBLICA Y PRECIOS DE LAS CASAS EN MÉXICO
RESUMEN
Este trabajo evalúa el impacto de la percepción de inseguridad pública en los precios de las viviendas en México. Para tal fin, se emplean dos modelos dinámicos de datos en panel que involucran 27 ciudades. El primero corresponde al periodo pre-pandemia, mientras que el segundo al periodo de la pandemia. La especificación del modelo se basa en un enfoque de oferta y demanda, mientras que la estimación se realiza mediante el procedimiento Arellano- Bond para atender problemas de endogeneidad. La evidencia indica que: 1) los precios de las viviendas caen conforme aumenta la percepción de inseguridad pública, y 2) mayores costos de construcción y niveles de ingreso encarecen las viviendas. Asimismo, la provisión de infraestructura pública y el costo real del crédito hipotecario generan efectos de oferta y demanda, por lo que el efecto neto de estas dos variables sobre el precio de las casas es negativo antes de la pandemia y positivo durante la pandemia. Finalmente, los precios de las casas involucran un fuerte componente inercial.
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