Keeping up with the Joneses: Superstar houses and the US mortgage frenzy

Built in 1927 on the eve of the Great Depression, the Palm Beach residence of President Donald Trump – Mar-a-Lago – ranks among the 20 biggest houses in the United States. At 62,500 square feet, it is about 35 times the size of the median suburban house in the country.

Analysing a large dataset of houses built between 1920 and 2009, my research asks whether this kind of ‘upscaling’ of housing size at the top of the distribution incited US households to ‘keep up with the Joneses’, with ultimately disastrous consequences in the 2008 financial crisis. CONT.

Clément Bellet (LSE Centre for Economic Performance), LSE USAPP