Asymmetric information and list-price reductions in the housing market

E. de Wit; B. van der Klaauw

doi:10.1016/j.regsciurbeco.2013.03.001

Asymmetric information and list-price reductions in the housing market

E. de Wit, B. van der Klaauw

Economics

Research output: Contribution to Journal › Article › Academic › peer-review

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 for many models for the housing market. In this paper, we estimate the causal effect of list-price reductions on the time houses remain for sale on the market 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 selling rate of a house, but also the rate of withdrawal from the market increases. © 2013 Elsevier B.V.

Original language	English
Pages (from-to)	507-520
Journal	Regional Science and Urban Economics
Volume	43
Issue number	3
DOIs	https://doi.org/10.1016/j.regsciurbeco.2013.03.001
Publication status	Published - 2013

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Cite this

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title = "Asymmetric information and list-price reductions in the housing market",

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 for many models for the housing market. In this paper, we estimate the causal effect of list-price reductions on the time houses remain for sale on the market 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 selling rate of a house, but also the rate of withdrawal from the market increases. {\textcopyright} 2013 Elsevier B.V.",

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AU - van der Klaauw, B.

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AB - In housing markets with asymmetric information list prices may signal unobserved properties of the house or the seller. Asymmetric information is the starting point for many models for the housing market. In this paper, we estimate the causal effect of list-price reductions on the time houses remain for sale on the market 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 selling rate of a house, but also the rate of withdrawal from the market increases. © 2013 Elsevier B.V.

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DO - 10.1016/j.regsciurbeco.2013.03.001

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