Housing Search Frictions: Evidence from Detailed Search Data and a Field Experiment
Eric W. Chan and
No 27209, NBER Working Papers from National Bureau of Economic Research, Inc
We randomized school quality information onto the listings of a nationwide housing website for low-income families. We use this variation and data on families' search and location choices to estimate a model of housing search and neighborhood choice that incorporates imperfect information and potentially biased beliefs. We find that imperfect information and biased beliefs cause families to live in neighborhoods with lower-performing, more segregated schools. Families underestimate school quality conditional on neighborhood characteristics. If we had ignored this information problem, we would have estimated that families value school quality relative to their commute downtown by half that of the truth.
JEL-codes: I0 I21 I24 I3 R0 R21 R31 (search for similar items in EconPapers)
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