Page 97 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.72, # 1, 2015, pp. 95-102

3. Percentage of labor force who has looked for work in the past four weeks

4. Discouraged workers who have stopped looking for work

5. Loosely or marginally attached workers who would like to obtain work

but have not looked for work recently

6. Part-time workers who want to work full time but cannot due to economic

reasons (BLS, 2012).

Unemployment has been chosen as one of the variables because people who are

unemployed cannot afford to purchase homes. Most mortgages require some sort of

guarantee and work history is the most common used criteria for determining the

purchase price to be affordable for a person. GDP is Gross Domestic Product which

measures the amount of production of the country in today's dollars (Economagic,

2011). This variable was chosen because GDP affects incomes and thus house sales.

Vacancy rate (VACRATE) according to Federal Housing Finance Agency is

measured as total number of vacated homes per each quarter of a year (FHFA, 2008,

p.10). Vacancy rates directly affect housing sales as the amount of vacant homes

potentially gives the amount of repurchased homes.

The relationship between INTEREST and HOUSE should be negative as

lowered interest rates should increase the number of housing sales. The relationship

between GDP and HOUSE should be positive as with the increase of GDP the

population increases income and is more willing to purchase a house. The

relationship between UNEMPLOYMENT and HOUSE should be negative as the

unemployment rate goes higher, less people are able to afford housing. The

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