Market Distortions When Agents Are Better Informed: The Value of Information in Real Estate Transactions

Steven Levitt and Chad Syverson

The Review of Economics and Statistics, 2008, vol. 90, issue 4, 599-611

Abstract: Agents are often better informed than the clients who hire them and may exploit this informational advantage. Real estate agents have an incentive to convince clients to sell their houses too cheaply and too quickly. We test these predictions by comparing home sales in which real estate agents are hired to when an agent sells his own home. Consistent with the theory, we find homes owned by real estate agents sell for 3.7% more than other houses and stay on the market 9.5 days longer, controlling for observables. Greater information asymmetry leads to larger distortions. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (238)

Downloads: (external link)
http://www.mitpressjournals.org/doi/pdf/10.1162/rest.90.4.599 link to full text (application/pdf)

Related works:
Working Paper: Market Distortions when Agents are Better Informed: The Value of Information in Real Estate Transactions (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpr:restat:v:90:y:2008:i:4:p:599-611

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=0034-6535

Access Statistics for this article

The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu

More articles in The Review of Economics and Statistics from MIT Press
Bibliographic data for series maintained by The MIT Press ().