The causal relationship between house prices and growth in the nine provinces of South Africa: evidence from panel - Granger causality tests
by Tsangyao Chang; Beatrice D. Simo-Kengne; Rangan Gupta
International Journal of Sustainable Economy (IJSE), Vol. 6, No. 4, 2014

Abstract: This paper analyses the causal relationship between housing activity and growth in nine provinces of South Africa for the period 1995-2011, using panel causality analysis, which accounts for cross-section dependency and heterogeneity across provinces. Our empirical results support unidirectional causality running from housing activity to economic growth for most of the provinces studied; bi-directional causality between housing activity and economic growth for Gauteng; and no causality in any direction between housing activity to economic growth in Eastern Cape and KwaZulu-Natal. Our findings provide important insights for housing policies and strategies for South Africa. Specifically, housing sector might be an efficient growth-led instrument for all the provinces except Eastern Cape and KwaZulu-Natal.

Online publication date: Fri, 31-Oct-2014

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