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Time on the Market and Probability of Sale Using a Generalized Geometric Hazard Model

Author

Listed:
  • Caudill Steven B.

    (Department of Economics, Florida Atlantic University, Boca Raton33431, FL, USA)

  • Bogosavljevic Ksenija
  • Johnson Ken H.

    (Department of Finance, Florida Atlantic University, Boca Raton33431, FL, USA)

  • Mixon Franklin G.

    (Center for Economic Education, Columbus State University, Columbus31907, GA, USA)

Abstract

This study makes two main contributions to the applied econometrics literature. First, it shows how the all-important marginal effects for time on the market and probability of sale can be obtained from any hazard model. Second, it extends the generalization of the geometric due to Gómez-Déniz, E. 2010. “Another Generalization of the Geometric Distribution.” Test 19: 399–415 to include covariates for use in the estimation of time on the market and probability of sale regressions in real estate, thus creating an entirely new hazard model based on probability of sale rather than time on the market. For the generalized geometric we develop expressions for the marginal effects (with approximate standard errors) for both the probability of sale and time on the market. This formulation allows the impact of changes in independent variables on both the probability of sale and time on the market to be determined from a single regression model. For comparison, we also obtain these two sets of marginal effects for the popular Weibull hazard model. The geometric, generalized geometric, and Weibull hazard models, along with two sets of marginal effects for each, are estimated using data on condominium listings in a metropolitan area in Florida.

Suggested Citation

  • Caudill Steven B. & Bogosavljevic Ksenija & Johnson Ken H. & Mixon Franklin G., 2022. "Time on the Market and Probability of Sale Using a Generalized Geometric Hazard Model," Journal of Econometric Methods, De Gruyter, vol. 11(1), pages 1-16, January.
  • Handle: RePEc:bpj:jecome:v:11:y:2022:i:1:p:1-16:n:1
    DOI: 10.1515/jem-2020-0017
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    More about this item

    Keywords

    discrete-time hazard model; generalized geometric distribution; Weibull distribution; time on market; probability of sale; real estate economics;
    All these keywords.

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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