The impact of population ageing on house prices: a micro-simulation approach

Yu Chen, Kenneth Gibb, Robert Wright, Chris Leishman

Research output: Contribution to journalArticlepeer-review

13 Citations (Scopus)


This paper attempts to estimate the impact of population ageing on house prices. There is considerable debate about whether population ageing puts downwards or upwards pressure on house prices. The empirical approach differs from earlier studies of this relationship, which are mainly regression analyses of macro time-series data. A micro-simulation methodology is adopted that combines a macro-level house price model with a micro-level household formation model. The case study is Scotland, a country that is expected to age rapidly in the future. The parameters of the household formation model are estimated with panel data from the British Household Panel Survey covering the period 1999-2008. The estimates are then used to carry out a set of simulations. The simulations are based on a set of population projections that represent a considerable range in the rate of population ageing. The main finding from the simulations is that population ageing—or more generally changes in age structure—is not likely a main determinant of house prices, at least in Scotland.

Original languageEnglish
Pages (from-to)523-542
Number of pages20
JournalScottish Journal of Political Economy
Issue number5
Early online date2 Oct 2012
Publication statusPublished - Nov 2012


  • house prices
  • ageing
  • modelling


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