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Determinants of Real Estate Licensee Income

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Abstract

This paper examines the factors that influence the income of real estate licensees. An empirical human capital earnings model is developed from a 1995 survey of Florida real estate brokers and salespeople. In seeking to explain earnings of real estate licensees, this study expands from previous studies by measuring several additional human capital components. A number of factors are seen to positively affect licensee income. These include (a) number of hours worked, (b) experience, (c) franchise affiliation, (d) being an owner/manager, (e) working in a metropolitan area, (f) level of job satisfaction, and (g) having errors and omissions insurance. Variables that have a negative effect on income include (a) being a female, (b) selling primarily residential properties, (c) age of licensee, (d) image perception, and (e) working weekends. Segmenting the data by income into thirds and comparing the means of the variables for the high- and low-income groups, several variable means are significantly different. the high income group has significantly higher means for these variables: (a) hourly income, (b) number of hours worked, (c) working full-time, (d) working on the weekend, (e) utilizing correspondence to satisfy continuing educational requirements, (f) work experience, (g) membership in clubs/professional organizations, (h) holding a broker's license, (i) length of current affiliation, (j) being a manager/owner, (k) holding professional designations, and (l) belonging to the state's Realtor association. The low-income group has a significantly higher variable mean for participation in residential sales.

Suggested Citation

  • G. Stacy Sirmans & Philip G. Swicegood, 1997. "Determinants of Real Estate Licensee Income," Journal of Real Estate Research, American Real Estate Society, vol. 14(2), pages 137-154.
  • Handle: RePEc:jre:issued:v:14:n:2:1997:p:137-154
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    References listed on IDEAS

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    1. Willis, Robert J., 1987. "Wage determinants: A survey and reinterpretation of human capital earnings functions," Handbook of Labor Economics,in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 10, pages 525-602 Elsevier.
    2. Michael Glower & Patric H. Hendershott, 1988. "The Determinants of REALTOR Income," Journal of Real Estate Research, American Real Estate Society, vol. 3(2), pages 53-68.
    3. Polachek, Solomon William, 1981. "Occupational Self-Selection: A Human Capital Approach to Sex Differences in Occupational Structure," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 60-69, February.
    4. James R. Follain & Terry Lutes & David A. Meier, 1987. "Why Do Some Real Estate Salespeople Earn More Than Others?," Journal of Real Estate Research, American Real Estate Society, vol. 2(1), pages 73-81.
    5. Linda L. Johnson & Michael J. Dotson & B.J. Dunlap, 1988. "Service Quality Determinants and Effectiveness in the Real Estate Brokerage Industry," Journal of Real Estate Research, American Real Estate Society, vol. 3(2), pages 21-36.
    6. Barry A. Diskin & Dean H. Gatzlaff, 1994. "An Examination of the Earnings of Real Estate Appraisers," Journal of Real Estate Research, American Real Estate Society, vol. 9(4), pages 507-524.
    7. Rosen, Sherwin, 1976. "A Theory of Life Earnings," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 45-67, August.
    8. Glenn E. Crellin & James R. Frew & G. Donald Jud, 1988. "The Earnings of REALTORS: Some Empirical Evidence," Journal of Real Estate Research, American Real Estate Society, vol. 3(2), pages 69-78.
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    Cited by:

    1. Daniel T. Winkler & W. Keener Hughen, 2012. "Fringe Benefits Compensation of Real Estate Agents and Brokers," International Real Estate Review, Asian Real Estate Society, vol. 15(3), pages 253-281.
    2. repec:ibn:ijefaa:v:9:y:2017:i:10:p:189-199 is not listed on IDEAS
    3. John D. Benjamin & G. Donald Jud & G. Stacy Sirmans, 2000. "Real Estate Brokerage and the Hosting Market: An Annotated Bibliography," Journal of Real Estate Research, American Real Estate Society, vol. 20(1), pages 217-278.
    4. J. Benjamin & P. Chinloy & G. Jud & D. Winkler, 2007. "Do Some People Work Harder than Others? Evidence from Real Estate Brokerage," The Journal of Real Estate Finance and Economics, Springer, vol. 35(1), pages 95-110, July.
    5. G. Martin Izzo & Barry E. Langford, 2008. "Data analysis with ordinal and interval dependent variables: examples from a study of real estate salespeople," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 1, pages 103-116, December.
    6. John D. Benjamin & G. Donald Jud & G. Stacy Sirmans, 2000. "What Do We Know About Real Estate Brokerage?," Journal of Real Estate Research, American Real Estate Society, vol. 20(1), pages 5-30.
    7. G Stacy Sirmans & David A. Macpherson, 2001. "Affinity Programs and the Real Estate Brokerage Industry," Journal of Real Estate Research, American Real Estate Society, vol. 22(3), pages 337-352.
    8. Yang Zhang & Hong Zhang & Michael J. Seiler, 2016. "The Effects of Time Constraints on Broker Behavior in China¡¦s Resale Housing Market: Theory and Evidence," International Real Estate Review, Asian Real Estate Society, vol. 19(3), pages 353-370.
    9. Donald Jud & Daniel T. Winkler, 1999. "A Model of Real Estate Sales as a Career Choice," Journal of Real Estate Research, American Real Estate Society, vol. 18(3), pages 481-490.
    10. G. Stacy Sirmans & Philip G. Swicegood, 2000. "Determining Real Estate Licensee Income," Journal of Real Estate Research, American Real Estate Society, vol. 20(1), pages 189-204.
    11. Jonathan Wiley & Justin Benefield & Marcus Allen, 2014. "Cyclical Determinants of Brokerage Commission Rates," The Journal of Real Estate Finance and Economics, Springer, vol. 48(1), pages 196-219, January.
    12. Richard Martin & Henry Munneke, 2010. "Real Estate Brokerage Earnings: The Role of Choice of Compensation Scheme," The Journal of Real Estate Finance and Economics, Springer, vol. 41(4), pages 369-389, November.
    13. Leonard V. Zumpano & Ken Johnson & Randy I. Anderson, 2007. "Listing Specialization and Residential Real Estate Licensee," Journal of Real Estate Research, American Real Estate Society, vol. 29(1), pages 75-90.

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    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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