Reference Dependence in the Housing Market

Steffen Andersen, Cristian Badarinza, Lu Liu, Julie Marx, Tarun Ramadorai

Publikation: KonferencebidragPaperForskningpeer review

Abstract

We model listing decisions in the housing market, and structurally estimate household preference and constraint parameters using comprehensive Danish data. Sellers optimize expected utility from property sales, subject to down-payment constraints, and internalize the effect of their choices on final sale prices and time-on-the-market. The data exhibit variation in the listing price-gains relationship with "demand concavity"; bunching in the sales distribution; and a rising listing propensity with gains. A new fact is that gains and down-payment constraints have interactive effects on listing prices. We find reference-dependence around the nominal purchase price and modest loss-aversion, but our canonical model cannot fully explain the new facts.
OriginalsprogEngelsk
Publikationsdato2020
Antal sider54
StatusUdgivet - 2020
BegivenhedThe 47th European Finance Association Annual Meeting. EFA 2020 - Virtual from The Aalto University School of Business, Helsinki, Finland
Varighed: 20 aug. 202021 aug. 2020
Konferencens nummer: 47
https://efa2020.efa-meetings.org/

Konference

KonferenceThe 47th European Finance Association Annual Meeting. EFA 2020
Nummer47
LokationVirtual from The Aalto University School of Business
Land/OmrådeFinland
ByHelsinki
Periode20/08/202021/08/2020
Internetadresse

Citationsformater