Pub Date : 2025-04-23DOI: 10.1016/j.jhe.2025.102061
Lauriane Belloy, Fabien Candau
The issue of income segregation plagues numerous cities, and in particular Paris which is studied here. To mitigate this problem, the local government has implemented redevelopment policies that increase incentives to convert offices and other commercial units into social housing in high-demand areas. We find that these policies have a negligible effect. Only the most restrictive legislation slightly stimulated the conversion of social housing in the city center; all subsequent policies had no effect.
{"title":"Promoting social housing : Insights from redevelopment policies in Paris","authors":"Lauriane Belloy, Fabien Candau","doi":"10.1016/j.jhe.2025.102061","DOIUrl":"10.1016/j.jhe.2025.102061","url":null,"abstract":"<div><div>The issue of income segregation plagues numerous cities, and in particular Paris which is studied here. To mitigate this problem, the local government has implemented redevelopment policies that increase incentives to convert offices and other commercial units into social housing in high-demand areas. We find that these policies have a negligible effect. Only the most restrictive legislation slightly stimulated the conversion of social housing in the city center; all subsequent policies had no effect.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"68 ","pages":"Article 102061"},"PeriodicalIF":1.4,"publicationDate":"2025-04-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143869408","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-08DOI: 10.1016/j.jhe.2025.102064
Sofia Fritzson , Joakim Jansson
We present novel evidence from the first correspondence study investigating the effect of individual non-cisgender signals in the housing market. In a preregistered trial, 800 fictitious letters were sent to rental apartment landlords in Sweden. Cismale applicants received fewer positive responses compared to ciswomen, while non-cisgender applicants had response rates that fell between those of ciswomen and cismen. The effects were strongest for apartments located outside of major cities. Non-cisgender applicants were also more often asked to clarify their gender. Additionally, cismale applicants were more likely to be addressed by the wrong name and were less frequently asked if they would bring any cohabitants.
{"title":"Living in the gender spectrum: Evidence from non-cisgender applications in the rental housing market","authors":"Sofia Fritzson , Joakim Jansson","doi":"10.1016/j.jhe.2025.102064","DOIUrl":"10.1016/j.jhe.2025.102064","url":null,"abstract":"<div><div>We present novel evidence from the first correspondence study investigating the effect of individual non-cisgender signals in the housing market. In a preregistered trial, 800 fictitious letters were sent to rental apartment landlords in Sweden. Cismale applicants received fewer positive responses compared to ciswomen, while non-cisgender applicants had response rates that fell between those of ciswomen and cismen. The effects were strongest for apartments located outside of major cities. Non-cisgender applicants were also more often asked to clarify their gender. Additionally, cismale applicants were more likely to be addressed by the wrong name and were less frequently asked if they would bring any cohabitants.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"68 ","pages":"Article 102064"},"PeriodicalIF":1.4,"publicationDate":"2025-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143860527","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-07DOI: 10.1016/j.jhe.2025.102063
Christina Stacy , Timothy R. Hodge , Timothy M. Komarek , Christopher Davis , Alena Stern , Owen Noble , Jorge Morales-Burnett , Amy Rogin
We generate the first cross-city panel dataset of rent control reforms and estimate their effect on the supply of rental housing overall and across varying levels of affordability. To identify reforms, we use machine learning algorithms to analyze over 76,000 newspaper articles from 7000 news outlets, spanning 27 metropolitan areas and >4000 census places across the US between 2000 and April of 2021. We then manually validate identified articles to ensure accuracy and combine these data with rental unit counts by affordability level, created using Census microdata. To assess the impact of rent control reforms on rental supply, we employ a two-way fixed effects model with place specific time trends and examine the robustness of our results with a staggered treatment design. Our results provide evidence that more restrictive rent control reforms are associated with a 10-percent reduction in the total number of rental units in a city. When stratified by affordability (based on U.S. Department of Housing and Urban Development definitions of affordability), these reforms lead to an increase in the availability of units affordable to extremely low-income households by about 52 % (with a lower-bound effect equal to 11 %), offset by a decline in units affordable to higher-income households of about 46 % (with a lower-bound estimate equal to 4 %). These findings highlight the complex trade-offs inherent to rent control policies, illustrating differential impacts across income groups and underscoring the nuanced nature of such interventions.
{"title":"Rent control and the supply of affordable housing","authors":"Christina Stacy , Timothy R. Hodge , Timothy M. Komarek , Christopher Davis , Alena Stern , Owen Noble , Jorge Morales-Burnett , Amy Rogin","doi":"10.1016/j.jhe.2025.102063","DOIUrl":"10.1016/j.jhe.2025.102063","url":null,"abstract":"<div><div>We generate the first cross-city panel dataset of rent control reforms and estimate their effect on the supply of rental housing overall and across varying levels of affordability. To identify reforms, we use machine learning algorithms to analyze over 76,000 newspaper articles from 7000 news outlets, spanning 27 metropolitan areas and >4000 census places across the US between 2000 and April of 2021. We then manually validate identified articles to ensure accuracy and combine these data with rental unit counts by affordability level, created using Census microdata. To assess the impact of rent control reforms on rental supply, we employ a two-way fixed effects model with place specific time trends and examine the robustness of our results with a staggered treatment design. Our results provide evidence that more restrictive rent control reforms are associated with a 10-percent reduction in the total number of rental units in a city. When stratified by affordability (based on U.S. Department of Housing and Urban Development definitions of affordability), these reforms lead to an increase in the availability of units affordable to extremely low-income households by about 52 % (with a lower-bound effect equal to 11 %), offset by a decline in units affordable to higher-income households of about 46 % (with a lower-bound estimate equal to 4 %). These findings highlight the complex trade-offs inherent to rent control policies, illustrating differential impacts across income groups and underscoring the nuanced nature of such interventions.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"68 ","pages":"Article 102063"},"PeriodicalIF":1.4,"publicationDate":"2025-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143826433","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-07DOI: 10.1016/j.jhe.2025.102062
Zhenguo Lin , Michael J. Seiler , Ralph B. Siebert (Professor of Economics) , Daniel T. Winkler (Professor of Finance and Real Estate)
Real estate contracts often have a wide variety of contractual contingencies. This study examines whether a property inspection clause, the sale of other property contingency clause, and a backup offer contract affect a property's time on the market and selling price. A theoretical model is created based on the relative bargaining power between the buyer and seller. Using a large sample of transactions from Miami-Dade County in South Florida, we find that contingency clauses are significantly affected by market conditions, time on the market, list price premiums, brokerage characteristics, home size, and age. The time on the market (TOM) for purchase contracts with a property (pending) inspection clause or a backup offer contract is shorter. In contrast, the TOM for a sale of other property clause is longer. When holding constant TOM, buyers pay less for properties with a property inspection clause. In comparison, sellers receive a premium for properties with a sale of other property contingency clause. A backup offer contract has no effect on the selling price.
{"title":"Selling price, time on the market, and contractual contingencies","authors":"Zhenguo Lin , Michael J. Seiler , Ralph B. Siebert (Professor of Economics) , Daniel T. Winkler (Professor of Finance and Real Estate)","doi":"10.1016/j.jhe.2025.102062","DOIUrl":"10.1016/j.jhe.2025.102062","url":null,"abstract":"<div><div>Real estate contracts often have a wide variety of contractual contingencies. This study examines whether a property inspection clause, the sale of other property contingency clause, and a backup offer contract affect a property's time on the market and selling price. A theoretical model is created based on the relative bargaining power between the buyer and seller. Using a large sample of transactions from Miami-Dade County in South Florida, we find that contingency clauses are significantly affected by market conditions, time on the market, list price premiums, brokerage characteristics, home size, and age. The time on the market (TOM) for purchase contracts with a property (pending) inspection clause or a backup offer contract is shorter. In contrast, the TOM for a sale of other property clause is longer. When holding constant TOM, buyers pay less for properties with a property inspection clause. In comparison, sellers receive a premium for properties with a sale of other property contingency clause. A backup offer contract has no effect on the selling price.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"68 ","pages":"Article 102062"},"PeriodicalIF":1.4,"publicationDate":"2025-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143826434","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-17DOI: 10.1016/j.jhe.2025.102060
Dongxiao Niu , Piet Eichholtz , Nils Kok
This paper examines the impact of information provision on the capitalization of flood risk in the housing market. We exploit a climate risk disclosure program and a subsequent flooding event in the Netherlands, using a difference-in-differences framework. The results indicate that annual flood risk communication letters sent to residents in flood-prone areas have minimal impact on housing prices. In contrast, a small-scale flood event triggers a 3.4 % decline in house prices, demonstrating the effectiveness of direct experience in influencing price adjustments. This price effect is short-lived and is observed only among local buyers who have access to both the letters and firsthand flood experience, while non-local buyers remain unresponsive. We also observe an increase in the time on market and listing-to-sales ratio among local buyers, alongside a rise in the renter-occupied household ratio following flood risk information provision. Small-sized, high-educated, and risk-averse families tend to relocate from the high-risk area. The results in this paper provide insights for policymakers grappling with how to reduce information asymmetry in housing markets in the face of increasing climate risks.
{"title":"Asymmetric information provision and flood risk salience","authors":"Dongxiao Niu , Piet Eichholtz , Nils Kok","doi":"10.1016/j.jhe.2025.102060","DOIUrl":"10.1016/j.jhe.2025.102060","url":null,"abstract":"<div><div>This paper examines the impact of information provision on the capitalization of flood risk in the housing market. We exploit a climate risk disclosure program and a subsequent flooding event in the Netherlands, using a difference-in-differences framework. The results indicate that annual flood risk communication letters sent to residents in flood-prone areas have minimal impact on housing prices. In contrast, a small-scale flood event triggers a 3.4 % decline in house prices, demonstrating the effectiveness of direct experience in influencing price adjustments. This price effect is short-lived and is observed only among local buyers who have access to both the letters and firsthand flood experience, while non-local buyers remain unresponsive. We also observe an increase in the time on market and listing-to-sales ratio among local buyers, alongside a rise in the renter-occupied household ratio following flood risk information provision. Small-sized, high-educated, and risk-averse families tend to relocate from the high-risk area. The results in this paper provide insights for policymakers grappling with how to reduce information asymmetry in housing markets in the face of increasing climate risks.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"68 ","pages":"Article 102060"},"PeriodicalIF":1.4,"publicationDate":"2025-03-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143704757","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-11DOI: 10.1016/j.jhe.2025.102049
Theo Herold
Groups with more transient accommodation needs, such as students and expatriates, are increasingly turning to long-term rental sublets to satisfy their demand. We empirically analyze seasonality and market dynamics of such a market in the context of university admissions in Sweden. We find no difference in rents during the first half of the calendar year in student cities, followed by a sharp increase in August that stays persistent throughout the year. Student city listing density increases until May but is completely offset by September. During the subsequent 8 weeks following the university admission period, rents grow between 4.6 and 5.4 percent on average, while a one percentage point increase in the ratio of student net movement to population is associated with an increase in rent between 0.77 and 0.98 percent. Using a more robust subsample, we find that daily listing density in student cities decreases by 29.6 percent relative to non-student cities in the week immediately following the admission periods.
{"title":"Dynamics of subletting: Evidence from Swedish university students","authors":"Theo Herold","doi":"10.1016/j.jhe.2025.102049","DOIUrl":"10.1016/j.jhe.2025.102049","url":null,"abstract":"<div><div>Groups with more transient accommodation needs, such as students and expatriates, are increasingly turning to long-term rental sublets to satisfy their demand. We empirically analyze seasonality and market dynamics of such a market in the context of university admissions in Sweden. We find no difference in rents during the first half of the calendar year in student cities, followed by a sharp increase in August that stays persistent throughout the year. Student city listing density increases until May but is completely offset by September. During the subsequent 8 weeks following the university admission period, rents grow between 4.6 and 5.4 percent on average, while a one percentage point increase in the ratio of student net movement to population is associated with an increase in rent between 0.77 and 0.98 percent. Using a more robust subsample, we find that daily listing density in student cities decreases by 29.6 percent relative to non-student cities in the week immediately following the admission periods.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"68 ","pages":"Article 102049"},"PeriodicalIF":1.4,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143641720","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-08DOI: 10.1016/j.jhe.2025.102057
Lorenzo Forni , Filippo Fortuna , Elena Giarda , Francesco Giovanardi , Demetrio Panarello
The building sector is responsible for a significant portion of greenhouse gas (GHG) emissions in Europe. Thus, achieving 2050 net-zero emissions targets necessitates the decarbonisation of the sector. This paper assesses the monetary costs, based on current technologies, of meeting the intermediate targets for 2030 and 2033 outlined in the EU Energy Performance of Buildings Directive (EPBD). The analysis focuses on two Italian regions with an ageing building stock and demonstrates that these costs are substantial. We employ open-source microdata on Energy Performance Certificates (EPCs) for the Lombardy and Piedmont regions, which provide information on dwellings’ energy class and recommendations of the necessary retrofits to reach a higher energy class, as well as CO2 emissions and energy consumption. We estimate a total expenditure of €118.9 billion to take Lombardy's and Piedmont's residential stock to at least energy class D, which is 20.2 % of the two regions’ GDP and 5.6 % of Italy's GDP. Understanding the balance of costs and benefits is crucial to evaluate the economic incentives for homeowners to adopt energy efficiency measures. Households are estimated to save yearly €3.3 billion in lower energy bills in the two regions, and CO2-equivalent emissions are estimated to drop annually by 6.9 million tons. While homeowners may internalise the private benefits, they are unlikely to account for the social benefits in terms of lower emissions. As a result, achieving the EPBD targets is likely to require public subsidies.
{"title":"The ‘Green buildings’ directive: A quantification of its costs and benefits in two Italian regions","authors":"Lorenzo Forni , Filippo Fortuna , Elena Giarda , Francesco Giovanardi , Demetrio Panarello","doi":"10.1016/j.jhe.2025.102057","DOIUrl":"10.1016/j.jhe.2025.102057","url":null,"abstract":"<div><div>The building sector is responsible for a significant portion of greenhouse gas (GHG) emissions in Europe. Thus, achieving 2050 net-zero emissions targets necessitates the decarbonisation of the sector. This paper assesses the monetary costs, based on current technologies, of meeting the intermediate targets for 2030 and 2033 outlined in the EU Energy Performance of Buildings Directive (EPBD). The analysis focuses on two Italian regions with an ageing building stock and demonstrates that these costs are substantial. We employ open-source microdata on Energy Performance Certificates (EPCs) for the Lombardy and Piedmont regions, which provide information on dwellings’ energy class and recommendations of the necessary retrofits to reach a higher energy class, as well as CO2 emissions and energy consumption. We estimate a total expenditure of €118.9 billion to take Lombardy's and Piedmont's residential stock to at least energy class D, which is 20.2 % of the two regions’ GDP and 5.6 % of Italy's GDP. Understanding the balance of costs and benefits is crucial to evaluate the economic incentives for homeowners to adopt energy efficiency measures. Households are estimated to save yearly €3.3 billion in lower energy bills in the two regions, and CO2-equivalent emissions are estimated to drop annually by 6.9 million tons. While homeowners may internalise the private benefits, they are unlikely to account for the social benefits in terms of lower emissions. As a result, achieving the EPBD targets is likely to require public subsidies.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"68 ","pages":"Article 102057"},"PeriodicalIF":1.4,"publicationDate":"2025-03-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143628435","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-06DOI: 10.1016/j.jhe.2025.102047
Eilidh Geddes , Nicole Holz
When designing rent control regulations, policy makers aim to create regulations that ensure affordable and stable housing for current tenants while minimizing exits from the rental market by landlords. Vacancy decontrol provisions that allow rent re-sets between tenants intend to strike a balance between a lower rent burden for current tenants and future potential profitability for landlords. However, such provisions also increase the incentive for landlords to evict tenants. Such evictions reduce both the anti-displacement and rent reduction effects of rent control. To study the effects of rent control on eviction behavior, we exploit variation across ZIP codes in policy exposure to the passage of the 1994 rent control referendum in San Francisco. We find that a ZIP code with the average level of treatment experiences an additional 34 eviction notices—an 83% increase—and an additional 13 wrongful eviction claims—a 125% increase. These effects were concentrated in low-income ZIP codes and were larger in years when average rent prices rose faster than the allowed rent increases for controlled units.
{"title":"Rational eviction: How landlords use evictions in response to rent control","authors":"Eilidh Geddes , Nicole Holz","doi":"10.1016/j.jhe.2025.102047","DOIUrl":"10.1016/j.jhe.2025.102047","url":null,"abstract":"<div><div>When designing rent control regulations, policy makers aim to create regulations that ensure affordable and stable housing for current tenants while minimizing exits from the rental market by landlords. Vacancy decontrol provisions that allow rent re-sets between tenants intend to strike a balance between a lower rent burden for current tenants and future potential profitability for landlords. However, such provisions also increase the incentive for landlords to evict tenants. Such evictions reduce both the anti-displacement and rent reduction effects of rent control. To study the effects of rent control on eviction behavior, we exploit variation across ZIP codes in policy exposure to the passage of the 1994 rent control referendum in San Francisco. We find that a ZIP code with the average level of treatment experiences an additional 34 eviction notices—an 83% increase—and an additional 13 wrongful eviction claims—a 125% increase. These effects were concentrated in low-income ZIP codes and were larger in years when average rent prices rose faster than the allowed rent increases for controlled units.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"68 ","pages":"Article 102047"},"PeriodicalIF":1.4,"publicationDate":"2025-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143621078","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-01DOI: 10.1016/j.jhe.2025.102046
Claire Océane Chevallier , Sarah El Joueidi
This paper develops a dynamic general equilibrium model in infinite horizon, in which deterministic rational housing bubbles may emerge. Borrowers are constrained by two macroprudential regulations: DTI and LTV limits. The study investigates whether housing bubbles can arise under these regulatory constraints and identifies the specific conditions for their emergence. Our findings show that: (1) with LTV regulations, the equilibrium may feature a housing bubble; (2) when agents face an LTV regulation, two equilibria may emerge: a bubbleless and a housing bubble equilibria; (3) tighter LTV regulations exacerbate the growth of housing bubbles.
{"title":"Housing regulation and bubbles","authors":"Claire Océane Chevallier , Sarah El Joueidi","doi":"10.1016/j.jhe.2025.102046","DOIUrl":"10.1016/j.jhe.2025.102046","url":null,"abstract":"<div><div>This paper develops a dynamic general equilibrium model in infinite horizon, in which deterministic rational housing bubbles may emerge. Borrowers are constrained by two macroprudential regulations: DTI and LTV limits. The study investigates whether housing bubbles can arise under these regulatory constraints and identifies the specific conditions for their emergence. Our findings show that: (1) with LTV regulations, the equilibrium may feature a housing bubble; (2) when agents face an LTV regulation, two equilibria may emerge: a bubbleless and a housing bubble equilibria; (3) tighter LTV regulations exacerbate the growth of housing bubbles.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"67 ","pages":"Article 102046"},"PeriodicalIF":1.4,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143526812","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-26DOI: 10.1016/j.jhe.2025.102048
Changha Jin, Sungho Yun
This study explores how loss aversion influences seller behavior in the housing market, employing both the reservation rule and the number-of-offers rule approaches. We show that loss aversion can increase the reservation value in an infinite-time model under the reservation rule, and a disposition effect can arise solely from reference dependence with risk-neutral sellers, consistent with prior research. In contrast, in a finite-time model with specific deadlines, the prospect of forced sales at a loss in the final period incentivizes sellers to opt for earlier sales, leading to dynamic fluctuations in the reservation value, both upwards and downwards. This finding adds a novel dimension to the existing literature. Furthermore, employing the number-of-offers rule, we find that loss aversion can lead sellers to await more offers, supporting the negative correlation between prices and time on the market.
{"title":"The impact of loss aversion on seller behavior in the housing market","authors":"Changha Jin, Sungho Yun","doi":"10.1016/j.jhe.2025.102048","DOIUrl":"10.1016/j.jhe.2025.102048","url":null,"abstract":"<div><div>This study explores how loss aversion influences seller behavior in the housing market, employing both the reservation rule and the number-of-offers rule approaches. We show that loss aversion can increase the reservation value in an infinite-time model under the reservation rule, and a disposition effect can arise solely from reference dependence with risk-neutral sellers, consistent with prior research. In contrast, in a finite-time model with specific deadlines, the prospect of forced sales at a loss in the final period incentivizes sellers to opt for earlier sales, leading to dynamic fluctuations in the reservation value, both upwards and downwards. This finding adds a novel dimension to the existing literature. Furthermore, employing the number-of-offers rule, we find that loss aversion can lead sellers to await more offers, supporting the negative correlation between prices and time on the market.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"68 ","pages":"Article 102048"},"PeriodicalIF":1.4,"publicationDate":"2025-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143551608","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
扫码关注我们
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号