This Positioning Paper outlines the research questions and methodology for an AHURI research study which utilises HILDA panel data and instrumental variable econometric techniques to interrogate the relationship between housing prices, household debt and labour supply in Australia. It provides preliminary evidence of important differences in the magnitude and expression of these relationships for partnered and single Australians over the life-course.

The Final Report will employ HILDA data in tandem with a historical series of median house prices at LGA level sourced from RP data. Both panel data and instrumental variable econometric techniques will be used in order to provide robust estimates of the links between house prices and household debt, and between labour supply, housing debt and house prices. Our proposed methodologies will address issues of sample selection, unobserved heterogeneity and endogeneity or simultaneity bias.