@techreport{bac6a20628aa445f90ed1da680d85a76,
title = "Reference Dependence in the Housing Market",
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.",
keywords = "Housing, Mortgages, Loss aversion, Reference dependence, Down-payment constraints, Housing, Mortgages, Loss aversion, Reference dependence, Down-payment constraints",
author = "Steffen Andersen and Cristian Badarinza and Lu Liu and Julie Marx and Tarun Ramadorai",
year = "2019",
month = nov,
language = "English",
series = "Centre for Economic Policy Research. Discussion Papers",
publisher = "Centre for Economic Policy Research",
number = "DP14147",
address = "United Kingdom",
type = "WorkingPaper",
institution = "Centre for Economic Policy Research",
}