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Estimating Bargaining Power in the Market for Existing Homes

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Author Info
John P. Harding (University of Connecticut)
Stuart S. Rosenthal (Syracuse University)
C. F. Sirmans (University of Connecticut)
Abstract

Although bargaining is common in markets for heterogeneous goods, it has largely been ignored in the hedonic literature. In a break from that tradition, we establish sufficient conditions that permit one to identify the effect of buyer and seller bargaining on hedonic models. Our model is estimated using a previously overlooked feature of the American Housing Survey that permits us to observe characteristics of both buyers and sellers. Results suggest that household wealth, gender, and other demographic traits influence bargaining power. In addition, variation in bargaining power arising from the presence of school-age children accounts for anomalous seasonal patterns reported in various widely cited indices of quality-adjusted house prices. Copyright (c) 2003 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/003465303762687794
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Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 85 (2003)
Issue (Month): 1 (01)
Pages: 178-188
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Handle: RePEc:tpr:restat:v:85:y:2003:i:1:p:178-188

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  2. David Ling & Milena Petrova, 2008. "Avoiding Taxes at Any Cost: The Economics of Tax-Deferred Real Estate Exchanges," The Journal of Real Estate Finance and Economics, Springer, vol. 36(4), pages 367-404, May. [Downloadable!] (restricted)
  3. John D. Benjamin & Peter Chinloy & William G. Hardin III, 2007. "Institutional-Grade Properties: Performance and Ownership," Journal of Real Estate Research, American Real Estate Society, vol. 29(3), pages 219_240. [Downloadable!]
  4. Charles Leung & Youngman Leong & Siu Wong, 2006. "Housing Price Dispersion: An Empirical Investigation," The Journal of Real Estate Finance and Economics, Springer, vol. 32(3), pages 357-385, May. [Downloadable!] (restricted)
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  5. Cotteleer, Geerte & Gardebroek, Cornelis, 2006. "Bargaining and market power in a GIS-based hedonic pricing model of the agricultural land market," 2006 Annual meeting, July 23-26, Long Beach, CA 21255, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  6. Anthony Pennington-Cross, 2006. "The Value of Foreclosed Property," Journal of Real Estate Research, American Real Estate Society, vol. 28(2), pages 193-214. [Downloadable!]
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  7. Abdul – Rasheed Amidu & Alirat Olayinka Agboola, 2009. "Empirical Evidence Of The Influences On First-Price Bid Auction Premiums," International Real Estate Review, Asian Real Estate Society, vol. 12(2), pages 157-170. [Downloadable!]
  8. Geoffrey Turnbull & Jonathan Dombrow, 2006. "Spatial Competition and Shopping Externalities: Evidence from the Housing Market," The Journal of Real Estate Finance and Economics, Springer, vol. 32(4), pages 391-408, June. [Downloadable!] (restricted)
  9. Peter Colwell & Henry Munneke, 2006. "Bargaining Strength and Property Class in Office Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 33(3), pages 197-213, November. [Downloadable!] (restricted)
  10. Geoffrey Turnbull & Jonathan Dombrow, 2007. "Individual Agents, Firms, and the Real Estate Brokerage Process," The Journal of Real Estate Finance and Economics, Springer, vol. 35(1), pages 57-76, July. [Downloadable!] (restricted)
  11. Steven Bourassa & Donald Haurin & Jessica Haurin & Martin Hoesli & Jian Sun, 2007. "House Price Changes and Idiosyncratic Risk: The Impact of Property Characteristics," Working Papers 07-03, Ohio State University, Department of Economics. [Downloadable!]
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  12. Meghan Busse & Florian Zettelmeyer & Jorge Silva-Risso, 2004. "$1000 Cash Back: Asymmetric Information in Auto Manufaturer Promotions," NBER Working Papers 10887, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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