A Simple Test of σ-Convergence in U.S. Housing Prices across BEA Regions
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This study probes the convergence of housing prices at the regional and the state levels. Regional classification follows the Bureau of Economic Analysis (BEA) designation of eight regions using quarterly data from 1975:1 to 2012:3. The statistical approach employed is σ-convergence, where regional and state variances are computed for testing the hypotheses. The results indicate that housing prices in nine states converge to the overall U.S. housing prices while the remaining forty-one states fail to do so. At the regional level, housing prices in the Great Lakes, Plains, Southeast, Rocky Mountains, and Southwest regions diverge from overall U.S. housing prices, while housing prices in New England, Mideast, and Far West tend to converge.