Anticipated vs. unanticipated house price movements and transaction volume
Yavuz Arslan (),
Birol Kanık and
Journal of Housing Economics, 2015, vol. 28, issue C, 121-129
Using data from England and Wales, we analyze the relationship between house prices and transaction volume (number of houses sold) and find that there is a negative relationship. When we decompose price changes into anticipated and unanticipated components we find that while anticipated house price changes positively affect transaction volume, unanticipated price changes have a negative effect. These findings give insights for the theories which try to explain the relationship between house prices and transaction volume. Our findings are inconsistent with the “down-payment effect” approach developed by Stein (1995) and Ortalo-Magne and Rady (2006), and with the “loss aversion behavior” approach discussed by Genesove and Mayer (2001). However, our results support the evidence of asymmetric decisions on the buyer and seller side documented in Case and Shiller (1988) and partially support the mechanisms in search and matching models.
Keywords: Expectations; Transaction volume; House prices (search for similar items in EconPapers)
JEL-codes: D8 G1 R3 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Anticipated vs. Unanticipated House Price Movements and Transaction Volume (2015)
Working Paper: Anticipated vs. Unanticipated House Price Movements and Transaction Volume (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:28:y:2015:i:c:p:121-129
Access Statistics for this article
Journal of Housing Economics is currently edited by H. O. Pollakowski
More articles in Journal of Housing Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().