Forecasting US real house price returns over 1831-2013: evidence from copula models

C-Tier
Journal: Applied Economics
Year: 2015
Volume: 47
Issue: 48
Pages: 5204-5213

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Given the existence of nonnormality and nonlinearity in the data generating process of real house price returns over the period of 1831-2013, this article compares the ability of various univariate copula models, relative to standard benchmarks (naive and autoregressive models) in forecasting real US house price over the annual out-of-sample period of 1874-2013, based on an in-sample of 1831-1873. Overall, our results provide overwhelming evidence in favour of the copula models (Normal, Student's <italic>t</italic>, Clayton, Frank, Gumbel, Joe and Ali-Mikhail-Huq) relative to linear benchmarks, and especially for the Student's <italic>t</italic>-copula, which outperforms all other models both in terms of in-sample and out-of-sample predictability results. Our results highlight the importance of accounting for nonnormality and nonlinearity in the data generating process of real house price returns for the US economy for nearly two centuries of data.

Technical Details

RePEc Handle
repec:taf:applec:v:47:y:2015:i:48:p:5204-5213
Journal Field
General
Author Count
2
Added to Database
2026-01-25