Matching models and housing markets: the role of the zero-profit condition

Gaetano Lisi

EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels

Abstract: The recent and growing literature which has extended the use of search and matching models even to the housing market does not use the free entry or zero-profit assumption as a key condition for solving the equilibrium of the model. This is because a straightforward adaptation of the basic matching model to the housing market seems impossible. However, this paper shows that the zero-profit condition can be easily reformulated to take the distinctive features of the housing market into account. Indeed, it helps to provide a theoretical explanation for well-known empirical regularities in the housing markets.

Keywords: trust (in) and power (of) tax authorities; tax compliance; tax evasion macroeconomics variables. (search for similar items in EconPapers)
JEL-codes: A12 A13 E26 H26 K34 K42 (search for similar items in EconPapers)
Date: 2012-11-22
New Economics Papers: this item is included in nep-dge, nep-iue and nep-ure
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http://www.eeri.eu/documents/wp/EERI_RP_2012_22.pdf (application/pdf)

Related works:
Journal Article: Matching Models and Housing Markets: the Role of the Zero-Profit Condition (2013)
Working Paper: Matching models and housing markets: the role of the zero-profit condition (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eei:rpaper:eeri_rp_2012_22

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