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Tacit collusion in housing markets: the case of Santiago, Chile

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  • Miguel Vargas

Abstract

In this article, using a detailed micro-database from Santiago, Chile, the potential existence of tacit collusion in housing markets is investigated. In order to perform the test, Santiago’s housing market is split into four different submarkets using hedonic price analysis and household’s socioeconomics characteristics. Then, using a GMM panel data model, regressions are run for each submarket, correlating industry’s markups with the aggregate level of activity. The main finding is that low and middle income submarkets present higher average markups and a pro-cyclical behaviour. This finding is consistent with a market where participants do not face capacity constraints and behave strategically to sustain tacit collusion during increasing demand periods.

Suggested Citation

  • Miguel Vargas, 2016. "Tacit collusion in housing markets: the case of Santiago, Chile," Applied Economics, Taylor & Francis Journals, vol. 48(54), pages 5257-5275, November.
    • Handle: RePEc:taf:applec:v:48:y:2016:i:54:p:5257-5275
    DOI: 10.1080/00036846.2016.1176111
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    References listed on IDEAS

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    1. Mahlon R. Straszheim, 1975. "An Econometric Analysis of the Urban Housing Market," NBER Books, National Bureau of Economic Research, Inc, number stra75-1, July.
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    Cited by:

    1. Lavaine, Emmanuelle, 2019. "Environmental risk and differentiated housing values: Evidence from the north of France," Journal of Housing Economics, Elsevier, vol. 44(C), pages 74-87.
    2. Lozano Navarro, Francisco-Javier, 2021. "Análisis de la concentración de mercado en la actividad inmobiliaria de Santiago [Market concentration of real estate in Santiago]," MPRA Paper 118262, University Library of Munich, Germany.
    3. Wen, Lanjiao & Chatalova, Lioudmila & Zhang, Anlu, 2022. "Can China's unified construction land market mitigate urban land shortage? Evidence from Deqing and Nanhai, Eastern coastal China," Land Use Policy, Elsevier, vol. 115(C).
    4. Emmanuelle Lavaine, 2019. "Environmental risk and differentiated housing values," Post-Print hal-02048712, HAL.

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