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The Effect of Price Anchoring on the Housing Market Based on Studies of Local Markets in Poland

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  • Kokot Sebastian

    (1 Faculty of Economics and Management, University of Szczecin, al. Papieża Jana Pawła II 22a 70-453, Szczecin, Poland)

Abstract

The article attempts to explain market levels of housing prices by supplementing the set of typical objective explanatory variables with variables of behavioral background. The proposed explanatory variables reflect the anchoring effect of prices, understood as the acceptance by market participants of such price levels that are justified not only in terms of socio-economic factors, but also in levels entrenched in their minds. The purpose of the study is to show that the anchoring effect identified through behavioral economics can be generalized and applied to the market behavior of many market participants, and thus explain the weak correspondence between listed housing prices and their objective factors. The study covers 17 local real estate markets in Poland and employs econometric models built under slightly modified procedures of backward stepwise regression.

Suggested Citation

  • Kokot Sebastian, 2023. "The Effect of Price Anchoring on the Housing Market Based on Studies of Local Markets in Poland," Real Estate Management and Valuation, Sciendo, vol. 31(3), pages 44-57, September.
    • Handle: RePEc:vrs:remava:v:31:y:2023:i:3:p:44-57:n:8
    DOI: 10.2478/remav-2023-0020
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    More about this item

    Keywords

    housing market; price anchoring; Poland;
    All these keywords.

    JEL classification:

    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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