{"title":"Steering in the housing market: Incentive induced by the tax scheme","authors":"Keyang Li , Jing Wu , Jianwei Xing , Jubo Yan","doi":"10.1016/j.regsciurbeco.2023.103953","DOIUrl":null,"url":null,"abstract":"<div><p>Intermediaries play an important role in markets with asymmetric information by reducing search friction and uncertainty for buyers and sellers. However, when a conflict of interest arises, agents may not fully act on behalf of their clients. Using a unique dataset of both housing resale transactions and agent showing records from a major brokerage<span> firm, we document the brokerage agents' steering behaviors induced by the differential treatment of certain housing units under the taxation scheme in China. Our results show that brokerage agents strategically promote the units that receive more favorable tax treatment because these units offer higher expected commissions. The steering efforts lead to better sales performances of the promoted houses and are highly correlated with the agents' ability and steering incentives. Buyers' viewing and purchasing decisions are significantly affected by agents’ steering.</span></p></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"103 ","pages":"Article 103953"},"PeriodicalIF":3.5000,"publicationDate":"2023-10-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Regional Science and Urban Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0166046223000881","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Intermediaries play an important role in markets with asymmetric information by reducing search friction and uncertainty for buyers and sellers. However, when a conflict of interest arises, agents may not fully act on behalf of their clients. Using a unique dataset of both housing resale transactions and agent showing records from a major brokerage firm, we document the brokerage agents' steering behaviors induced by the differential treatment of certain housing units under the taxation scheme in China. Our results show that brokerage agents strategically promote the units that receive more favorable tax treatment because these units offer higher expected commissions. The steering efforts lead to better sales performances of the promoted houses and are highly correlated with the agents' ability and steering incentives. Buyers' viewing and purchasing decisions are significantly affected by agents’ steering.
期刊介绍:
Regional Science and Urban Economics facilitates and encourages high-quality scholarship on important issues in regional and urban economics. It publishes significant contributions that are theoretical or empirical, positive or normative. It solicits original papers with a spatial dimension that can be of interest to economists. Empirical papers studying causal mechanisms are expected to propose a convincing identification strategy.