Do birds of the same feather flock together? The cultural geography of global housing price interaction

The literature documents that cultural factors affect housing or real estate markets and their interactions. Given this, we map global housing markets into different cultural blocs, and study the dynamics of price interaction among them. We investigate the extent and manner of price interaction within and between cultural blocs using a battery of econometric tests and network analyses. We confirm that housing markets within the same blocs are highly correlated, cointegrated and react to each other more quickly than those among different blocs. Our results provide a new perspective on the important role of culture in the transmission of linkages among housing markets globally and have vital implications for the global coordination of policies to stabilize housing markets.