Matching models and housing markets: the role of the zero-profit condition
AbstractThe recent and growing literature which has extended the use of search and matching models even to the housing market does not use the free entry or zero-profit assumption as a key condition for solving the equilibrium of the model. This is because a straightforward adaptation of the basic matching model to the housing market seems impossible. However, this paper shows that the zero-profit condition can be easily reformulated to take the distinctive features of the housing market into account. Indeed, it helps to provide a theoretical explanation for well-known empirical regularities in the housing markets.
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Bibliographic InfoPaper provided by Economics and Econometrics Research Institute (EERI), Brussels in its series EERI Research Paper Series with number EERI_RP_2012_22.
Date of creation: 22 Nov 2012
Date of revision:
trust (in) and power (of) tax authorities; tax compliance; tax evasion macroeconomics variables.;
Other versions of this item:
- Gaetano Lisi, 2013. "Matching Models and Housing Markets: the Role of the Zero-Profit Condition," Economic Research Guardian, Weissberg Publishing, vol. 3(1), pages 54-60, June.
- Gaetano Lisi, 2013. "Matching models and housing markets: the role of the zero-profit condition," Working Papers 1301, Department of Applied Economics II, Universidad de Valencia.
- A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
- E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-15 (All new papers)
- NEP-DGE-2012-12-15 (Dynamic General Equilibrium)
- NEP-IUE-2012-12-15 (Informal & Underground Economics)
- NEP-URE-2012-12-15 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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, Asian Real Estate Society, vol. 14(3), pages 311-329.
- Brian Petereson, 2009. "Fooled by Search: Housing Prices, Turnover and Bubbles," Caepr Working Papers 2009-004, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
- Gaetano Lisi, 2013. "On the Functional Form of the Hedonic Price Function: A Matching-theoretic Model and Empirical Evidence," International Real Estate Review, Asian Real Estate Society, vol. 16(2), pages 189-207.
- Charles Ka Yui Leung & Youngman Chun Fai Leong & Siu Kei Wong, 2005.
"Housing Price Dispersion: an empirical investigation,"
00012, Chinese University of Hong Kong, Department of Economics.
- 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.
- Charles Ka-Yui Leung & Youngman Chun Fai Leong & Siu Kei Wong, 2005. "Housing Price Dispersion: An Empirical Investigation," Departmental Working Papers _167, Chinese University of Hong Kong, Department of Economics.
- Wheaton, William C, 1990. "Vacancy, Search, and Prices in a Housing Market Matching Model," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1270-92, December.
- Robert Novy-Marx, 2009. "Hot and Cold Markets," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(1), pages 1-22.
- Lisi, Gaetano, 2011.
"The Hedonic Price Function in a Matching Model of Housing Market,"
32697, University Library of Munich, Germany.
- Gaetano Lisi, 2011. "The Hedonic Price Function in a Matching Model of Housing Market," Economics Bulletin, AccessEcon, vol. 31(3), pages 2347-2355.
- Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
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