Rental housing market and directed search

Julien Pascal

No 179, BCL working papers from Central Bank of Luxembourg

Abstract: This paper introduces new empirical findings concerning the rental housing market in the Paris metropolitan area. Combining a new dataset gathered from online advertisements for Parisian rentals with a hedonic model that incorporates both apartment features and property-specific photographs, two main stylized facts are established. First, with comparable property features, landlords who ask for lower rent attract a greater number of applicants, consistent with predictions from standard directed search models. Second, many landlords employ a two-stage pricing approach, initially advertising a high rent and then reducing it after a "wait-and-see" period. This previously unreported feature is consistent with the slow Dutch auction mechanism studied in the auction literature and observed in the property sales market.

Keywords: Rental Housing Market; Hedonic Model; Directed Search Models; Landlords’Pricing Strategies; Machine Learning (search for similar items in EconPapers)
JEL-codes: C21 C45 D83 R21 R31 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2023-12
New Economics Papers: this item is included in nep-big and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:bcl:bclwop:bclwp179

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