Bargaing power in apartment sales in Corsica:A latent class approach

Steven B Caudill, Claudio Detotto and Dominique Prunetti

No 11, Working Papers from Laboratoire Lieux, Identités, eSpaces et Activités (LISA)

Abstract: This paper adds to the literature by extending the bargaining model of Harding, Rosenthal, and Sirmans (2003) to a latent class framework. We examine data on apartment sales in Corsica over the period 2006to 2016. Our results indicate that the Corsican housing market has two distinct segments and that bargaining power of buyers and sellers is not the same in these two segments.In particular,we find that the French mainlanders have morebargaining power when sellingin one market segment but they experience adecrease in bargaining power when buying in the other segment. Corsican buyers exhibit significant bargaining power in both sub-markets but local sellers exhibit significant bargaining power in just one segmentof the market.Auxiliary regressions indicate that the apartments associated with the first segment are more spacious, less likely to be new, more likely to have a garden, and typically have longer travel times to any of the local amenities like doctors, pharmacies and the downtown area. From this we conclude that apartments in one segment are more likely to be rural and at a greater distance from the coastcompared to the other segment.

Keywords: Latent class; hedonic regression; bargaining power (search for similar items in EconPapers)
JEL-codes: C24 R3 R31 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2019-01
New Economics Papers: this item is included in nep-ure
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https://umrlisa.univ-corse.fr/RePEc/lia/pdf/WorkingPaper11.pdf First version, 2019 (application/pdf)

Related works:
Journal Article: Bargaining power in apartment sales in Corsica: A latent class approach (2020)
Working Paper: Bargaining power in apartment sales in Corsica: A latent class approach (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:lia:wpaper:011

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