Asymmetric information and list-price reductions in the housing market

Erik de Wit and Bas van der Klaauw

Regional Science and Urban Economics, 2013, vol. 43, issue 3, 507-520

Abstract: In housing markets with asymmetric information list prices may signal unobserved properties of the house or the seller. Asymmetric information is the starting point for many models for the housing market. In this paper, we estimate the causal effect of list-price reductions on the time houses remain for sale on the market to test for the presence of asymmetric information. We use very rich and extensive administrative data from the Netherlands. Our empirical results show that list-price reductions significantly increase the selling rate of a house, but also the rate of withdrawal from the market increases.

Keywords: Time on the market; Duration analysis; Transaction prices; Selectivity (search for similar items in EconPapers)
JEL-codes: C41 D82 R21 R31 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Related works:
Working Paper: Asymmetric Information and List Price Reductions in the Housing Market (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:43:y:2013:i:3:p:507-520

DOI: 10.1016/j.regsciurbeco.2013.03.001

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