Inflation expectations and price-setting decisions: insights from the housing market

Elisa Guglielminetti () and Michele Loberto ()
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Elisa Guglielminetti: Bank of Italy
Michele Loberto: Bank of Italy

No 1507, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We investigate how inflation expectations affect pricing decisions in the housing market. We leverage a randomized control trial embedded within an Italian survey of real estate agents and combine survey data for each agent with high-frequency listing prices observed on a large digital platform. Exploiting an exogenous shift in inflation expectations generated by information treatment, we find that higher inflation expectations cause a one-to-one increase in housing listing prices, on average. The pass-through is weaker in more concentrated and low-demand markets, as well as for agents who are more pessimistic about housing and credit developments.

Keywords: inflation expectations; randomized control trial; housing market; market concentration (search for similar items in EconPapers)
JEL-codes: D43 D84 E31 E52 R31 (search for similar items in EconPapers)
Date: 2025-11
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