But the exclusion restriction can fail if high-end demand affects low-end rents separately from the housing ladder channel, eg. by inducing low-skill employment.
Evan Mast and Liang & Kindström have papers showing the housing markets are connected by examining the effects of adding new supply, which seems more policy relevant.
To shift only high-end demand (without also shifting low-end demand), we could use a Bartik shifter for IT workers. See:
https://www.fpeckert.me/EGW.pdf
But the exclusion restriction can fail if high-end demand affects low-end rents separately from the housing ladder channel, eg. by inducing low-skill employment.
Another option: use the foreign buyer demand shock from Sakong or Gorback and Keys, which could be a cleaner high-end-only shock.
https://drive.google.com/file/d/1Xcfvjp4xVudOpjH0WmXu0VGZ0hcb6-gb/view
https://www.nber.org/papers/w27370
Evan Mast and Liang & Kindström have papers showing the housing markets are connected by examining the effects of adding new supply, which seems more policy relevant.
Yup, that's the opposite direction: increase high-end supply, reduce low-end prices.
https://www.buildingabundance.ca/p/vacancy-chains