Price Dispersion in the Housing Market: The Role of Bargaining and Search Costs
This paper develops a matching model à la Pissarides (2000) in order to explain a basic fact of housing markets: price dispersion. The variance in house prices is basically due to both the ex-ante heterogeneity of the parties (i.e., bargaining power, tastes, asymmetric information) and the search costs of buyers and sellers. In fact, sellers and buyers spend time and money before concluding the deal. Furthermore, the house price is substantially determined by bargaining between the parties. These factors affect the selling price and lead to price dispersion. This simple theoretical model is able to take these distinctive features of the housing markets into account.
|Date of creation:||02 Oct 2011|
|Date of revision:|
|Note:||View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00628323/en/|
|Contact details of provider:|| Web page: http://hal.archives-ouvertes.fr/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Charles Ka Yui Leung & Youngman Chun Fai Leong & Siu Kei Wong, 2005.
"Housing Price Dispersion: an empirical investigation,"
00012, Chinese University of Hong Kong, Department of Economics.
- Charles Leung & Youngman Leong & Siu Wong, 2006. "Housing Price Dispersion: An Empirical Investigation," The Journal of Real Estate Finance and Economics, Springer, vol. 32(3), pages 357-385, May.
- Charles Ka-Yui Leung & Youngman Chun Fai Leong & Siu Kei Wong, 2005. "Housing Price Dispersion: An Empirical Investigation," Departmental Working Papers _167, Chinese University of Hong Kong, Department of Economics.
- Gaetano Lisi, 2011.
"The Hedonic Price Function in a Matching Model of Housing Market,"
AccessEcon, vol. 31(3), pages 2347-2355.
- Lisi, Gaetano, 2011. "The Hedonic Price Function in a Matching Model of Housing Market," MPRA Paper 32697, University Library of Munich, Germany.
- Gabriel, Stuart A. & Shack-Marquez, Janice & Wascher, William L., 1992.
"Regional house-price dispersion and interregional migration,"
Journal of Housing Economics,
Elsevier, vol. 2(3), pages 235-256, September.
- Stuart A. Gabriel & Janice Shack-Marquez & William L. Wascher, 1990. "Regional house price dispersion and interregional migration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
- Stuart A. Gabriel & Janice Shack-Marquez & William L. Wascher, 1991. "Regional house-price dispersion and interregional migration," Working Paper Series / Economic Activity Section 122, Board of Governors of the Federal Reserve System (U.S.).
- Quan, Daniel C & Quigley, John M, 1991. "Price Formation and the Appraisal Function in Real Estate Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 4(2), pages 127-46, June.
- Genesove, David & Han, Lu, 2010.
"Search and Matching in the Housing Market,"
CEPR Discussion Papers
7777, C.E.P.R. Discussion Papers.
- James Albrecht & Axel Anderson & Eric Smith & Susan Vroman, 2007. "Opportunistic Matching In The Housing Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 641-664, 05.
- Eyal Baharad & Benjamin Eden, 2004.
"Price Rigidity and Price Dispersion: Evidence from Micro Data,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 7(3), pages 613-641, July.
- Eyal Baharad & Benjamin Eden, 2003. "Price Rigidity and Price Dispersion: Evidence from Micro Data," Vanderbilt University Department of Economics Working Papers 0321, Vanderbilt University Department of Economics.
- John P. Harding & John R. Knight & C.F. Sirmans, 2003. "Estimating Bargaining Effects in Hedonic Models: Evidence from the Housing Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 31(4), pages 601-622, December.
- Tristan-Pierre Maury & Fabien Tripier, 2010. "Strategies for search on the housing market and their implications for price dispersion," Working Papers hal-00480484, HAL.
- C. Y. Yiu & K. F. Man & S. K. Wong, 2008. "Trading Volume and Price Dispersion in Housing Markets," Journal of Property Research, Taylor & Francis Journals, vol. 25(3), pages 203-219, December.
When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-00628323. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.