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Asymmetric Information and List Price Reductions in the Housing Market

Listed author(s):
  • Erik R. de Wit

    (University of Amsterdam)

  • Bas van der Klaauw

    (VU University Amsterdam)

This discussion paper resulted in a publication in the 'Regional Science and Urban Economics' , 2013, 43, 507-520. In housing markets with asymmetric information list prices may signal unobserved properties of the house or the seller. Asymmetric information is the starting point of many models for the housing market. In this paper, we estimate the causal effect of list-price reductions to test for the presence of asymmetric information. We use very rich and extensive administrative data from the Netherlands. Our empirical results show that list-price reductions significantly increase the probability of selling a house, but also the rate of withdrawal from the market increases.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 10-038/3.

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Date of creation: 10 Apr 2010
Handle: RePEc:tin:wpaper:20100038
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