"Ripple Effects" and Forecasting Home Prices in Los Angeles, Las Vegas, and Phoenix

We examine the time-series relationship between housing prices in Los Angeles, Las Vegas, and Phoenix. First, temporal Granger causality tests reveal that Los Angeles housing prices cause housing prices in Las Vegas (directly) and Phoenix (indirectly). In addition, Las Vegas housing prices cause housing prices in Phoenix. Los Angeles housing prices prove exogenous in a temporal sense and Phoenix housing prices do not cause prices in the other two markets. Second, we calculate out-of-sample forecasts in each market, using various vector autoregessive (VAR) and vector error-correction (VEC) models, as well as Bayesian, spatial, and causality versions of these models with various priors. Different specifications provide superior forecasts in the different cities. Finally, we consider the ability of theses time-series models to provide accurate out-of-sample predictions of turning points in housing prices that occurred in 2006:Q4. Recursive forecasts, where the sample is updated each quarter, provide reasonably good forecasts of turning points.

Conventionalism and the World as Bare Sense-Data

We are confident of many of the judgements we make as to what sorts of alterations the members of nature’s kinds can survive, and what sorts of events mark the ends of their existences. But is our confidence based on empirical observation of nature’s kinds and their members? Conventionalists deny that we can learn empirically which properties are essential to the members of nature’s kinds. Judgements of sameness in kind between members, and of numerical sameness of a member across time, merely project our conventions of individuation. Our confidence is warranted because apart from those conventions there are no phenomena of kind-sameness or of numerical sameness across time. There is just “stuff” displaying properties. This paper argues that conventionalists can assign no properties to the “stuff” beyond immediate phenomenal properties. Consequently they cannot explain how each of us comes to be able to wield “our conventions”.