Housing markets form an integral part of the economy and everyone is affected by housing price fluctuations, either directly as owners or indirectly as renters. Accordingly, housing markets are monitored by many parties including policy makers, investors, landlords and planners. House price indices are an important tool for assessing housing markets, although standard indices are probably not fully capturing and understanding the complex dynamics of these markets.
How much does the housing market affect the economy? How to measure aggregate house price movements? Are measurement tools fit for purpose?
Sofie Waltl, a postdoc researcher at Luxembourg Institute of Socio-Economic Research (LISER) and assistant professor at the Vienna University of Economics and Business (WU), is developing methodology to improve economic measurement tools mainly for housing-, wealth- and inequality-related issue.
A mathematical approach to economics
Through her various research projects, Sofie Waltl showed that standard house price indices are not enough to fully understand and capture the dynamics in housing markets. Indeed, standard index construction techniques might be imprecise to detect changes in the general tendency of house price trends. This issue is critical as the relation between prices and rents varies quite significantly within a market.
To address this challenge, the economist designs new techniques or adaptations of existing techniques to enhance the assessment of housing markets. This also includes exploring other types of data collection including surveys and experimental techniques. Having several types of data all describing the same phenomenon allows her to study also how people think about their decisions.
“I work on developing methodology to improve economic measurement tools mainly for housing-, wealth- and inequality-related issues. Due to my work on housing topics, I also drifted a bit towards policy-evaluation and design. In particular, I recently worked on rent control policies in a historic setting in St. Petersburg and currently a recent debate about rent control in Berlin.”
“All projects have in common being very data-intensive and I’m fascinated employing all kinds of data sources: hard to access historic sources and messy web-scraped data up until neatly collected experimental, survey and administrative data. In short: I love data and how to filter the information I am interested in from a bulk of numbers.”Dr Sofie Waltl
Research, what else?
After graduating in mathematics from the University of Graz in Austria, Sofie Waltl was interested in applying what she had gained. To her studying mathematics leads to a certain way of thinking : “you acquire profound skills to discover meaningful paths through chaos, find creative problem-solving skills and are used to intellectual complex moves”. Following a conversation with one of her supervisors she realised that mathematics played a key role for economists to build precisely defined models from which exact conclusions can be derived with mathematical logic. And so the economist emerged.
“While writing my Master’s thesis and after a couple of internships, I was quite convinced that research was the thing I wanted to do. I’ve always had a bit the feeling that research is kind of a natural fit.”Dr Sofie Waltl
Why Luxembourg as a research destination?
To Sofie Waltl, “working in such a multi-disciplinary research setting is very fruitful.”
“There is a lot happening in a rather small place and communication across institutions works quite well at the level of researchers. I believe that this is something rather hard to find in large countries – simply because you cannot just physically pass by at every single institution you are interested in without having to travel large distances.”
Dr Sofie Waltl
An FNR CORE programme grantee
On top of holding a postdoc position in LISER, Sofie Waltl successfully applied for a large-scale research grant as a principal investigator by the Luxembourg National Research Fund (FNR) CORE programme.
Her research project, entitled Are People Aware of their (Housing) Wealth? Assessing Owner-Estimated Home Values in Survey and Experimental Data, seeks to develop accurate measurement of the stock of housing wealth, its distribution within society, and heterogeneity in (housing) wealth.
Through this programme, she can hire young researchers, target more complex research designs and just scale up by increasing the number of research papers she is working on as well as the number of research collaborations worldwide.
More about FNR CORE programme
About living in Luxembourg
The researcher likes the multi-cultural flair in the city of Luxembourg. In particular, she enjoys the local culture and the many activities in the city, especially during summertime.
“On a normal day in Luxembourg, I usually would have used at least some words from 2-4 languages – just on my way from home to work. I really like the combination of locals and people from everywhere.”Dr Sofie Waltl
More about Sofie Waltl
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