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Measuring the Cost of Imperfect Information in the Tokyo Housing Market


  • Chihiro Shimizu

    (RECRUIT Real Estate Research Institute)

  • Kiyohiko G. Nishimura

    (Faculty of Economics, University of Tokyo)

  • Yasushi Asami

    (Center for Spatial Information Science, University of Tokyo)


The cost of imperfect information is estimated in the real estate market of resale condominiums in central Tokyo by using a new, comprehensive data set of resale condominium transactions. The results suggest a substantial cost. Specifically, if information were perfectly available and marketing time is null, sellers would get benefits of 10.58% based on average interest rate, 31.28% on gross rent and 22.59% on net rent, against imputed rent of their property. Buyers spend 1,042,000 Yen on search activities for one transaction, which would be saved if information were prefect. This cost amounts to be equivalent to 13.2% of buyers' average annual income.

Suggested Citation

  • Chihiro Shimizu & Kiyohiko G. Nishimura & Yasushi Asami, 2003. "Measuring the Cost of Imperfect Information in the Tokyo Housing Market," CIRJE F-Series CIRJE-F-238, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2003cf238

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    References listed on IDEAS

    1. Arnott, Richard, 1989. "Housing Vacancies, Thin Markets, and Idiosyncratic Tastes," The Journal of Real Estate Finance and Economics, Springer, vol. 2(1), pages 5-30, February.
    2. Kiyohiko G. Nishimura, 1999. "Expectations Heterogeneity and Excessive Price Sensitivity in the Land Market," The Japanese Economic Review, Japanese Economic Association, vol. 50(1), pages 26-43, March.
    3. Xiaolu Gao & Yasushi Asami, 2001. "The External Effects of Local Attributes on Living Environment in Detached Residential Blocks in Tokyo," Urban Studies, Urban Studies Journal Limited, vol. 38(3), pages 487-505, March.
    4. John Krainer, 1999. "Real estate liquidity," Economic Review, Federal Reserve Bank of San Francisco, pages 14-26.
    5. Edward A. Baryla & Leonard V. Zumpano, 1995. "Buyer Search Duration in the Residential Real Estate Market: The Role of the Real Estate Agent," Journal of Real Estate Research, American Real Estate Society, vol. 10(1), pages 1-14.
    6. Wheaton, William C, 1990. "Vacancy, Search, and Prices in a Housing Market Matching Model," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1270-1292, December.
    7. Donald Haurin, 1988. "The Duration of Marketing Time of Residential Housing," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 16(4), pages 396-410, December.
    8. Van der Vlist, Arno J & Rietveld, Piet & Nijkamp, Peter, 2002. "Residential Search and Mobility in a Housing Market Equilibrium Model," The Journal of Real Estate Finance and Economics, Springer, vol. 24(3), pages 277-299, May.
    9. W. Douglass Shaw, 1992. "Searching for the Opportunity Cost of an Individual's Time," Land Economics, University of Wisconsin Press, vol. 68(1), pages 107-115.
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