IDEAS home Printed from https://ideas.repec.org/a/bla/reesec/v19y1991i4p532-547.html
   My bibliography  Save this article

A Price Dispersion Equilibrium in a Spatially Differentiated Housing Market with Search Costs

Author

Listed:
  • Colin Read

Abstract

An equilibrium model of search in a spatially differentiated rental housing market is formulated that predicts both rent dispersion and equilibrium vacancies. The equilibrium rent distribution is determined on the landlord's (rental supply) side given tenants' search strategies. Then tenants' optimal search strategy, denned by the share of the market a tenant searches, is determined given the costs and benefits of search and the distribution of landlords' rents. The equations of supply and demand for rental units are then combined to derive a costly information, free‐entry Nash equilibrium in the market rents. Finally, the sensitivity of equilibrium vacancies and rents to changes in search costs and other exogenous parameters is explored.

Suggested Citation

  • Colin Read, 1991. "A Price Dispersion Equilibrium in a Spatially Differentiated Housing Market with Search Costs," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(4), pages 532-547, December.
    • Handle: RePEc:bla:reesec:v:19:y:1991:i:4:p:532-547
    DOI: 10.1111/1540-6229.00566
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1540-6229.00566
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1540-6229.00566?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:hal:spmain:info:hdl:2441/9023 is not listed on IDEAS
    2. repec:spo:wpecon:info:hdl:2441/8988 is not listed on IDEAS
    3. Gabriel Desgranges & Étienne Wasmer, 2000. "Appariements sur le marché du logement," Annals of Economics and Statistics, GENES, issue 58, pages 253-287.
    4. Etienne Wasmer, 2005. "Housing market discrimination, housing regulations and intermediaries," Sciences Po publications info:hdl:2441/9023, Sciences Po.
    5. Leung, Charles Ka Yui & Zhang, Jun, 2011. "“Fire Sales” in housing market: is the house-searching process similar to a theme park visit?," MPRA Paper 29127, University Library of Munich, Germany.
    6. Gaetano Lisi, 2011. "Price Dispersion in the Housing Market: The Role of Bargaining and Search Costs," Working Papers hal-00628323, HAL.
    7. Christopher J. Mayer, 1993. "A model of real estate auctions versus negotiated sales," Working Papers 93-3, Federal Reserve Bank of Boston.
    8. Miceli, Thomas J. & Sirmans, C.F., 2013. "Efficiency rents: A new theory of the natural vacancy rate for rental housing," Journal of Housing Economics, Elsevier, vol. 22(1), pages 20-24.
    9. Maury, Tristan-Pierre & Tripier, Fabien, 2014. "Search strategies on the housing market and their implications on price dispersion," Journal of Housing Economics, Elsevier, vol. 26(C), pages 55-80.
    10. Forgionne, G. A., 1996. "Forecasting army housing supply with a DSS-delivered econometric model," Omega, Elsevier, vol. 24(5), pages 561-576, October.
    11. Lisi, Gaetano, 2011. "Price dispersion in the housing market: the role of bargaining and search costs," MPRA Paper 33863, University Library of Munich, Germany.
    12. C. Y. Yiu & C. S. Tam & P. Y. Lee, 2005. "Volume‐related Heteroskedasticity and Liquidity Premium in Hedonic Pricing Model," Journal of Property Research, Taylor & Francis Journals, vol. 23(1), pages 39-51, July.
    13. C. Yiu & S. Wong & K. Chau, 2009. "Transaction Volume and Price Dispersion in the Presale and Spot Real Estate Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 38(3), pages 241-253, April.
    14. repec:hal:spmain:info:hdl:2441/8988 is not listed on IDEAS
    15. Etienne Wasmer, 2005. "Housing market discrimination, housing regulations and intermediaries," SciencePo Working papers hal-01053551, HAL.
    16. Charles Ka Yui Leung & Jun Zhang, 2011. ""Fire Sales" in Housing Market: Is the House- Search Process Similar to a Theme Park Visit?," International Real Estate Review, Global Social Science Institute, vol. 14(3), pages 311-329.
    17. Tristan-Pierre Maury & Fabien Tripier, 2010. "Strategies for search on the housing market and their implications for price dispersion," Working Papers hal-00480484, HAL.
    18. Gabriel Desgranges & Étienne Wasmer, 2000. "Appariements sur le marché du logement," Annals of Economics and Statistics, GENES, issue 58, pages 253-287.
    19. repec:hal:wpspec:info:hdl:2441/8988 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reesec:v:19:y:1991:i:4:p:532-547. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/areueea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.