Housing search frictions and optimal search

Hans Koster and Jos van Ommeren ()

Economics Letters, 2020, vol. 189, issue C

Abstract: By deriving a ‘housing market Hosios condition’, we show that the main conclusions of the seminal paper on housing search frictions by Wheaton (1990) were erroneously derived. We show that households may search too much, optimally, or too little, which is in contrast to the paper’s conclusion that they always search too little. Furthermore, we show that exogenous increases in housing vacancies always have a negative effect on house prices, given standard assumptions.

Keywords: Housing market; Search frictions; Optimal search (search for similar items in EconPapers)
JEL-codes: R30 R33 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:189:y:2020:i:c:s0165176520300240

DOI: 10.1016/j.econlet.2020.108980

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