Shiller's Real Home Price Index plotted alongside log(US Population) scaled by a constant factor:
The scaling factor was determined by minimizing the residual sum of squares between the two time series.
Shiller's Real Home Price Index plotted alongside a linear trendline of the scaled Population series above:
Trendline equation shown below chart legend.
Shiller's Real Home Price Index plotted alongside parallel lines to the trendline above:
The y intercept of the top line is set equal to the y intercept (1890 value) multiplied by 9/8 (+1/8). The y intercept of the bottom line is equal to the 1890 value multiplied by 5/8 (-3/8).
Shiller's Real Home Price Index plotted alongside parallel lines to the trendlines above:
Since 1890 merely corresponds to the first year of data collection, rather than something less arbitrary, the y intercepts of the top and bottom lines were manually adjusted and the subdivisions of the channel calculated accordingly.
A bull/bear bias test:
The lower charts are simply the difference between the corresponding pink and green lines above.
Shiller's Real Home Price Index plotted alongside a linear trendline of the scaled Population series above:
Shiller's Real Home Price Index plotted alongside parallel lines to the trendline above:
Shiller's Real Home Price Index plotted alongside parallel lines to the trendlines above:
A bull/bear bias test:
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