Asymmetric Information and List Price Reductions in the Housing Market

Bas van der Klaauw and Erik de Wit

No 7799, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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 of many models for the housing market. In this paper, we estimate the causal effect of list-price reductions 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 probability of selling a house, but also the rate of withdrawal from the market increases.

Keywords: Duration analysis; Selectivity; Time-on-the-market; Transaction prices (search for similar items in EconPapers)
JEL-codes: C41 D82 R21 R31 (search for similar items in EconPapers)
Date: 2010-05
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Citations: View citations in EconPapers (4)

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Journal Article: Asymmetric information and list-price reductions in the housing market (2013)
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