Since 2004, ten U.S. states have enacted laws that mandate real estate brokers to provide real estate consumers with a minimum level of services. The federal government and the academic literature suggest that such state laws are a result of anti-competitive industry collusion, and serve no consumer protection justification. This paper attempts to determine the factors that led states to adopt minimum service requirements, despite significant federal opposition. The analytical structure employs hazard models, using a unique set of economic and institutional attributes for 50 U.S. states from 2000 to 2007. Contrary to initial expectations based on the literature, our results indicate that both strength of a state.s Realtor association and broker membership on real estate licensing boards decrease, rather than increase, the likelihood of state adoption of broker minimum service requirements. Factors that do increase the likelihood of adoption include higher state licensing complaints and a democratically controlled state legislature.
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Paper provided by University of Connecticut, Department of Economics in its series Alumni working papers with number
2009-01.
Length: 34 pages Date of creation: Apr 2009 Date of revision: Handle: RePEc:uct:alumni:2009-01
Note: Authors acknowledge helpful comments from John Clapp. All remaining errors are ours. Contact details of provider: Postal: University of Connecticut 341 Mansfield Road, Unit 1063 Storrs, CT 06269-1063 Phone: (860) 486-4889 Fax: (860) 486-4463 Web page: http://www.econ.uconn.edu/ More information through EDIRC
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Find related papers by JEL classification: C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods K11 - Law and Economics - - Basic Areas of Law - - - Property Law L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services R21 - Urban, Rural, and Regional Economics - - Household Analysis - - - Housing Demand
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