IESET.
Hypotheses·distribution·housing_cost_driven_real_wage_divergence

Within Anglo-liberal economies (UK, US, Australia) over 1995-2020, housing-supply-restricted high-opportunity metro areas exhibit real-wage-net-of-housing-cost trajectories that diverge substantially from their headline real-wage trajectories, such that the standard "real wage stagnation" story for these metros is amplified (larger stagnation) when housing costs are properly netted out, while housing-supply-elastic metros show the opposite pattern — headline real-wage stagnation looks less severe after housing is netted.

The specific claim is that the cross-metro divergence in housing supply elasticity (Hilber-Vermeulen for UK, Saiz for US, Kendall- Tulip for Australia) is a first-order driver of cross-metro differences in welfare-relevant real wage growth, and that national aggregate real-wage series systematically understate welfare losses in supply-restricted metros while overstating them in supply-elastic metros. A clean supported finding would show that the supply- elasticity coefficient on net-of-housing real wage growth is statistically significant and quantitatively large (at least 20% of cross-metro variance in welfare-adjusted real wage trajectories).

INCONCLUSIVEengine/runs/housing_cost_driven_real_wage_divergence

INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['manual:constructed']

confidence cueResult card produced; verdict unclassified.

policy briefCoverage too thin

In ordinary language

In plain terms, this asks whether housing supply elasticity is actually linked to better or worse real wage net of housing cost growth from 1995 to 2020.

plain answer

This test cannot make a firm call yet. no outcome variable loaded; missing: ['manual:constructed']

why it matters

Distributional claims often sound morally clear but are empirically complex. This test asks whether the proposed channel explains real differences across places.

how the test works

It compares 3 country or place units from 1995 to 2020, using a panel fe design, with fixed effects for metro and country year.

what was measured
What changed
  • Housing supply elasticity
Possible pathway
  • Metro real residential price growth
  • Metro productivity growth
What we checked
  • Real wage net of housing cost growth
  • Headline real wage growth
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

3 input datasets, 0 unresolved missing series, provenance status: partial provenance.

Results

engine/runs/housing_cost_driven_real_wage_divergence
1007550250199520082020GBRUSAAUS
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show real_wage_net_of_housing_cost_growth across 3 sampled countries over 1995–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for housing_cost_driven_real_wage_divergence. Published chart will be generated from engine/runs/housing_cost_driven_real_wage_divergence/chart_data.json.

Who has skin in the game — schools predicting on this

17 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Austrian Business Cycle Theory (ABCT)wins if SUPPORTEDpartial/no-callChicago School Monetarismwins if SUPPORTEDpartial/no-callClassical Liberalwins if SUPPORTEDpartial/no-callDegrowth / Ecological Macroeconomicswins if REFUTEDpartial/no-callDemocratic Socialism (Bernsteinian revisionism + modern)wins if REFUTEDpartial/no-callStructuralist / Developmentalistwins if MIXEDpartial/no-callEco-Socialism / Red-Greenwins if REFUTEDpartial/no-callEmpirical Pragmatist (the framework's house position)wins if MIXEDpartial/no-callNew Institutional Economicswins if MIXEDpartial/no-callMarket Socialism (Lange-Lerner tradition)wins if REFUTEDpartial/no-callMarxian Political Economywins if REFUTEDpartial/no-callMarxism-Leninism (central-planning implementation)wins if REFUTEDpartial/no-callModern Monetary Theorywins if REFUTEDpartial/no-callNew Keynesian (mainstream synthesis)wins if MIXEDpartial/no-callOrdoliberalism (Freiburg School)wins if SUPPORTEDpartial/no-callPost-Keynesianwins if REFUTEDpartial/no-callSocial Democraticwins if REFUTEDpartial/no-call

Pre-registration

pre-registered
first-spec commit bae09ab · 2026-04-29T22:09:42Z
run generated · 2026-06-29T17:48:34Z

Within Anglo-liberal economies (UK, US, Australia) over 1995-2020, housing-supply-restricted high-opportunity metro areas exhibit real-wage-net-of-housing-cost trajectories that diverge substantially from their headline real-wage trajectories, such that the standard "real wage stagnation" story for these metros is amplified (larger stagnation) when housing costs are properly netted out, while housing-supply-elastic metros show the opposite pattern — headline real-wage stagnation looks less severe after housing is netted. The specific claim is that the cross-metro divergence in housing supply elasticity (Hilber-Vermeulen for UK, Saiz for US, Kendall- Tulip for Australia) is a first-order driver of cross-metro differences in welfare-relevant real wage growth, and that national aggregate real-wage series systematically understate welfare losses in supply-restricted metros while overstating them in supply-elastic metros. A clean supported finding would show that the supply- elasticity coefficient on net-of-housing real wage growth is statistically significant and quantitatively large (at least 20% of cross-metro variance in welfare-adjusted real wage trajectories).

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Primary v2 local diagnostic is a national US FRED proxy, not the full metro supply-elasticity identification design. It compares total-private average hourly earnings deflated by all-items CPI with the same earnings deflated by CPI shelter from 2006-03 through 2020-02, the longest clean local FRED overlap ending before the pandemic. The diagnostic supports the narrower welfare-wage measurement channel if all-items real wage growth exceeds shelter-deflated wage growth by at least 5 percentage points over the window and the year-over-year growth correlation is below 0.90. It is refuted if the gap is below 2 percentage points or the correlation is at least 0.90. Otherwise it is partial. Full support for the original claim still requires the metro supply-elasticity panel.

formal test & threshold
test:      fred_us_ahe_all_cpi_vs_shelter_cpi_2006_2020
threshold: support if all-items real wage growth minus shelter-deflated wage growth >=5pp and yoy-growth correlation <0.90; refute if gap <2pp or correlation >=0.90

Method

Template
panel_fe
Fixed effects
metro, country_year
Clustering
metro
Sample
3 countries · 1995 – 2020
Evidence type
associational

Panel metro x year. Primary specification: net_real_wage_growth_mt = b0 + b1*supply_elasticity_m + b2*productivity_growth_mt + b3*controls + alpha_m (metro FE) + gamma_ct (country-year FE) + epsilon Country-year FE absorb national-level policy and macro shocks. Metro FE absorb time-invariant metro features. Supply elasticity is time-invariant per its academic construction, so b1 is identified via the interaction of elasticity with time trend; primary specification therefore includes supply_elasticity * time_trend as the key variable. Secondary specification: drop metro FE and identify via cross-metro variation in elasticity, reported as robustness. Cluster-robust SEs at metro.

Data

VariableSourceTransform
real_wage_net_of_housing_cost_growth
outcome
manual:constructedtier 4
annualised_growth
headline_real_wage_growth
outcome
bls:CES0500000008tier 1
real_index_base_1995
housing_supply_elasticity
treatment
manual:from_academic_sourcestier 4
level
metro_real_residential_price_growth
channel
bis:WS_SPPtier 2
real_annualised_growth
metro_productivity_growth
channel
manual:constructedtier 4
annualised_growth
metro_population_growth
control
manual:constructedtier 4
annualised_growth
metro_employment_share_high_skill
control
manual:constructedtier 4
level
national_real_gdp_per_capita
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
real_annualised_growth

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — housing_cost_driven_real_wage_divergence

Verdict: INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['manual:constructed']

Pre-registration

  • Claim: Within Anglo-liberal economies (UK, US, Australia) over 1995-2020, housing-supply-restricted high-opportunity metro areas exhibit real-wage-net-of-housing-cost trajectories that diverge substantially from their headline real-wage trajectories, such that the standard "real wage stagnation" story for these metros is amplified (larger stagnation) when housing costs are properly netted out, while housing-supply-elastic metros show the opposite pattern — headline real-wage stagnation looks less severe after housing is netted. The specific claim is that the cross-metro divergence in housing supply elasticity (Hilber-Vermeulen for UK, Saiz for US, Kendall- Tulip for Australia) is a first-order driver of cross-metro differences in welfare-relevant real wage growth, and that national aggregate real-wage series systematically understate welfare losses in supply-restricted metros while overstating them in supply-elastic metros. A clean supported finding would show that the supply- elasticity coefficient on net-of-housing real wage growth is statistically significant and quantitatively large (at least 20% of cross-metro variance in welfare-adjusted real wage trajectories).
  • Falsification rule: Primary v2 local diagnostic is a national US FRED proxy, not the full metro supply-elasticity identification design. It compares total-private average hourly earnings deflated by all-items CPI with the same earnings deflated by CPI shelter from 2006-03 through 2020-02, the longest clean local FRED overlap ending before the pandemic. The diagnostic supports the narrower welfare-wage measurement channel if all-items real wage growth exceeds shelter-deflated wage growth by at least 5 percentage points over the window and the year-over-year growth correlation is below 0.90. It is refuted if the gap is below 2 percentage points or the correlation is at least 0.90. Otherwise it is partial. Full support for the original claim still requires the metro supply-elasticity panel.
  • Falsification test: fred_us_ahe_all_cpi_vs_shelter_cpi_2006_2020

Estimate

  • Error: no outcome variable loaded; missing: ['manual:constructed']

Variables resolved

  • bls:CES0500000008 → headline_real_wage_growth (outcome, publisher=bls, n=3)
  • manual:from_academic_sources → housing_supply_elasticity (treatment, publisher=constructed, n=78)
  • bis:WS_SPP → metro_real_residential_price_growth (decomposition_channels, publisher=bis, n=2272)
  • world_bank_wdi:NY.GDP.PCAP.KD → national_real_gdp_per_capita (controls, publisher=world_bank_wdi, n=12104)

Variables missing data

  • manual:constructed (outcome, name=real_wage_net_of_housing_cost_growth) — vintage not on disk
  • manual:constructed (decomposition_channels, name=metro_productivity_growth) — vintage not on disk
  • manual:constructed (controls, name=metro_population_growth) — vintage not on disk
  • manual:constructed (controls, name=metro_employment_share_high_skill) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:48:34+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Data-gated on native fetchers for ONS subnational (UK), BEA regional (US), ABS state accounts (AU) — none currently ready. v1 uses BLS metro earnings + FHFA/Zillow US housing (via OWID mirror for Zillow) + OECD regional wage approximations for UK and AUS. Substantive v2 promotion requires the three national fetchers. Supply-elasticity coding sheet will be committed to data/manual/housing_supply_elasticity.csv with Saiz, Hilber-Vermeulen, Kendall-Tulip values. v2 subnational wiring: Added BLS OEWS state median hourly wages (proxy for metro earnings), BLS LAU state unemployment, ABS state labour force (AU component), Eurostat NUTS2 unemployment + GDP (UK + EU regional). ONS subnational still needs native fetcher; Eurostat NUTS2 partially covers UK regions.

Authored framework. Read the transparency note.