The Impact of Oil Price on the Housing Market: A Case Study of Stavanger
Master thesis
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https://hdl.handle.net/11250/3089264Utgivelsesdato
2023Metadata
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Our master thesis investigates the intricate relationship between the price of oil and thehousing market in Stavanger. Our thesis is motivated by the impact of oil on the region'seconomy, and its potential impact on the housing market. Stavanger, known as the oil capitalof Norway, provides a unique context for this study, making it an ideal location to explore theintricate interplay between the oil market and the housing sector.This leads us to our research question;How does the oil price affect the housing market in Stavanger?To try to answer our research question, we will use quantitative research. Our data consists of64 observations from the 1st quarter of 2006 to the 4th quarter of 2022. Variables we haveincluded are the House Price Index, Brent Crude Oil Price, House Stock, Policy Rate, MedianIncome, and Unemployment Rate for Norway and Stavanger. Using a first-differencemultiple linear regression analysis, we test for differences in a model including and excludingoil price as a variable and look for differences in a national average for Norway compared toStavanger.Our results show a statistically significant impact of oil prices on housing prices in Stavangerand Norway. Still, the oil price has a higher correlation with the house prices in Stavanger,supporting our hypothesis. Our regressions show signs of multicollinearity, and some modelvariables showed no significant impact on housing prices. This indicates that our model hasomitted variables.To conclude our research, we found evidence of oil impacting the housing prices inStavanger, but further research needs to be done on the topic as our models show signs ofinaccuracies.