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An Empirical Stationary Equilibrium Search Model Of The Housing Market

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  • Paul E. Carrillo

Abstract

This article specifies and estimates a computationally tractable stationary equilibrium model of the housing market. The model is rich and incorporates many of its unique features: buyers’ and sellers’ simultaneous search behavior, heterogeneity in their motivation to trade, transaction costs, a trading mechanism with posting prices and bargaining, and the availability of an exogenous advertising technology that induces endogenous matching. Estimation uses Maximum Likelihood methods and Multiple Listing Services data. The estimated model is used to simulate housing market outcomes when (a) the amount of information displayed on housing listings increases and (b) real estate agent’s commission rates change.

Suggested Citation

  • Paul E. Carrillo, 2012. "An Empirical Stationary Equilibrium Search Model Of The Housing Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(1), pages 203-234, February.
    • Handle: RePEc:wly:iecrev:v:53:y:2012:i:1:p:203-234
    DOI: j.1468-2354.2011.00677.x
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