(This abstract was borrowed from another version of this item.)"> (This abstract was borrowed from another version of this item.)">
[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/bla/randje/v44y2013i2p337-360.html
   My bibliography  Save this article

Days on market and home sales

Author

Listed:
  • Catherine Tucker
  • Juanjuan Zhang
  • Ting Zhu
Abstract
In April 2006, the real estate listing service in Massachusetts adopted a new policy that prohibits home sellers from resetting their property’s “days on market” to zero through relisting. We study the effect of this new policy on single-family home sales along the Massachusetts-Rhode Island border, using homes in Rhode Island, which did not change its policy, as the control group. We find that the policy change leads to a relative sale price reduction of around $11,000 for affected homes in Massachusetts. Homes caught in the middle of the policy change are the hardest hit; the sudden release of the cumulative days on market information lowers the average sale price by $21,500. Sellers respond to the new policy by reducing the listing price to shorten their property’s days on market.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Catherine Tucker & Juanjuan Zhang & Ting Zhu, 2013. "Days on market and home sales," RAND Journal of Economics, RAND Corporation, vol. 44(2), pages 337-360, June.
    • Handle: RePEc:bla:randje:v:44:y:2013:i:2:p:337-360
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/rand.2013.44.issue-2
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Steven D. Levitt & Chad Syverson, 2008. "Market Distortions When Agents Are Better Informed: The Value of Information in Real Estate Transactions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 599-611, November.
    2. Rajiv Kalra & Kam C. Chan, 1994. "Censored Sample Bias, Macroeconomic Factors, and Time on Market of Residential Housing," Journal of Real Estate Research, American Real Estate Society, vol. 9(2), pages 253-262.
    3. Igal Hendel & Aviv Nevo & François Ortalo-Magné, 2009. "The Relative Performance of Real Estate Marketing Platforms: MLS versus FSBOMadison.com," American Economic Review, American Economic Association, vol. 99(5), pages 1878-1898, December.
    4. Esther Duflo & Emmanuel Saez, 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 815-842.
    5. Norman G. Miller, 1978. "Time on the Market and Selling Price," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 6(2), pages 164-174, June.
    6. Anglin, Paul M & Rutherford, Ronald & Springer, Thomas M, 2003. "The Trade-Off Between the Selling Price of Residential Properties and Time-on-the-Market: The Impact of Price Setting," The Journal of Real Estate Finance and Economics, Springer, vol. 26(1), pages 95-111, January.
    7. Alan T. Sorensen, 2006. "Social learning and health plan choice," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 929-945, December.
    8. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
    9. Curtis R. Taylor, 1999. "Time-on-the-Market as a Sign of Quality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(3), pages 555-578.
    10. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
    11. Joseph Farrell & Matthew Rabin, 1996. "Cheap Talk," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 103-118, Summer.
    12. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
    13. Alan T. Sorensen, 2006. "Social learning and health plan choice," RAND Journal of Economics, The RAND Corporation, vol. 37(4), pages 929-945, December.
    14. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    15. Michel Glower & Donald R. Haurin & Patric H. Hendershott, 1998. "Selling Time and Selling Price: The Influence of Seller Motivation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 26(4), pages 719-740, December.
    16. Hongbin Cai & Yuyu Chen & Hanming Fang, 2009. "Observational Learning: Evidence from a Randomized Natural Field Experiment," American Economic Review, American Economic Association, vol. 99(3), pages 864-882, June.
    17. Juanjuan Zhang, 2010. "The Sound of Silence: Observational Learning in the U.S. Kidney Market," Marketing Science, INFORMS, vol. 29(2), pages 315-335, 03-04.
    18. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    19. Jacob Belkin & Donald J. Hempel & Dennis W. McLeavey, 1976. "An Empirical Study of Time on Market Using Multidimensional Segmentation of Housing Markets," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 4(2), pages 57-75, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xin He & Zhenguo Lin & Yingchun Liu & Michael J. Seiler, 2020. "Search Benefit in Housing Markets: An Inverted U‐Shaped Price and TOM Relation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(3), pages 772-807, September.
    2. Nathan Yang, 2011. "An Empirical Model of Industry Dynamics with Common Uncertainty and Learning from the Actions of Competitors," Working Papers 11-16, NET Institute.
    3. Jeong Ho (John) Kim & Kyungmin Kim & Marilyn Pease, 2024. "Unemployment Duration Under Flexible Information Acquisition," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(1), pages 471-503, February.
    4. Sushil Bikhchandani & David Hirshleifer & Omer Tamuz & Ivo Welch, 2024. "Information Cascades and Social Learning," Journal of Economic Literature, American Economic Association, vol. 62(3), pages 1040-1093, September.
    5. Tong Guo & Srinivasaraghavan Sriram & Puneet Manchanda, 2020. "“Let the Sunshine In”: The Impact of Industry Payment Disclosure on Physician Prescription Behavior," Marketing Science, INFORMS, vol. 39(3), pages 516-539, May.
    6. Liang, Cong & Hui, Eddie C.M. & Yip, Tsz Leung, 2018. "Time on market (TOM): The impact of new residential stamp duty," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 503(C), pages 1117-1130.
    7. Tommaso Bondi, 2019. "Alone, Together. Product Discovery Through Consumer Ratings," Working Papers 19-09, NET Institute.
    8. Eerola, Essi & Lyytikäinen, Teemu, 2015. "On the role of public price information in housing markets," Regional Science and Urban Economics, Elsevier, vol. 53(C), pages 74-84.
    9. Palazzo, Francesco, 2017. "Search costs and the severity of adverse selection," Research in Economics, Elsevier, vol. 71(1), pages 171-197.
    10. Justin T. Kistler & Ramkumar Janakiraman & Subodha Kumar & Vikram Tiwari, 2021. "The Effect of Operational Process Changes on Preoperative Patient Flow: Evidence from Field Research," Production and Operations Management, Production and Operations Management Society, vol. 30(6), pages 1647-1667, June.
    11. Vrinda Kadiyali & Jeffrey Prince & Daniel Simon, 2014. "Is Dual Agency in Real Estate a Cause for Concern?," The Journal of Real Estate Finance and Economics, Springer, vol. 48(1), pages 164-195, January.
    12. Bruce L. Gordon & Daniel T. Winkler, 2017. "The Effect of Listing Price Changes on the Selling Price of Single-Family Residential Homes," The Journal of Real Estate Finance and Economics, Springer, vol. 55(2), pages 185-215, August.
    13. Martel, Jordan, 2018. "Quality, price, and time-on-market," Economics Letters, Elsevier, vol. 171(C), pages 97-101.
    14. Aydin, Erdal & Correa, Santiago Bohórquez & Brounen, Dirk, 2019. "Energy performance certification and time on the market," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    15. Qiyuan Wang, 2024. "For-Sale-by-Owner Platforms and Intermediation Pricing: Evidence from a Natural Experiment," Marketing Science, INFORMS, vol. 43(2), pages 346-359, March.
    16. Michaletz Vladimir B. & Artemenkov Andrey, 2018. "A Demand - and Supply- Side Constrained Model for Liquidation Value and Related Exposure Periods," Real Estate Management and Valuation, Sciendo, vol. 26(2), pages 48-59, June.
    17. Ni Huang & Tianshu Sun & Peiyu Chen & Joseph M. Golden, 2019. "Word-of-Mouth System Implementation and Customer Conversion: A Randomized Field Experiment," Information Systems Research, INFORMS, vol. 30(3), pages 805-818, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John Beshears & James J. Choi & David Laibson & Brigitte C. Madrian & Katherine L. Milkman, 2015. "The Effect of Providing Peer Information on Retirement Savings Decisions," Journal of Finance, American Finance Association, vol. 70(3), pages 1161-1201, June.
    2. Ruomeng Cui & Dennis J. Zhang & Achal Bassamboo, 2019. "Learning from Inventory Availability Information: Evidence from Field Experiments on Amazon," Management Science, INFORMS, vol. 65(3), pages 1216-1235, March.
    3. Mugerman, Yevgeny & Sade, Orly & Shayo, Moses, 2014. "Long term savings decisions: Financial reform, peer effects and ethnicity," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 235-253.
    4. Leonardo Bursztyn & Florian Ederer & Bruno Ferman & Noam Yuchtman, 2012. "Understanding Peer Effects in Financial Decisions: Evidence from a Field Experiment," NBER Working Papers 18241, National Bureau of Economic Research, Inc.
    5. Leonardo Bursztyn & Florian Ederer & Bruno Ferman & Noam Yuchtman, 2014. "Understanding Mechanisms Underlying Peer Effects: Evidence From a Field Experiment on Financial Decisions," Econometrica, Econometric Society, vol. 82(4), pages 1273-1301, July.
    6. Liu, Hong & Sun, Qi & Zhao, Zhong, 2014. "Social learning and health insurance enrollment: Evidence from China's New Cooperative Medical Scheme," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 84-102.
    7. Han, Lu & Strange, William C., 2015. "The Microstructure of Housing Markets," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 813-886, Elsevier.
    8. Khim Yong, Goh & Kai-Lung, Hui & I.P.L., Png, 2008. "Social Interaction, Observational Learning, and Privacy: the "Do Not Call" Registry," MPRA Paper 8225, University Library of Munich, Germany.
    9. Chong (Alex) Wang & Xiaoquan (Michael) Zhang & Il-Horn Hann, 2018. "Socially Nudged: A Quasi-Experimental Study of Friends’ Social Influence in Online Product Ratings," Information Systems Research, INFORMS, vol. 29(3), pages 641-655, September.
    10. Fishman, Arthur & Fishman, Ram & Gneezy, Uri, 2019. "A tale of two food stands: Observational learning in the field," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 101-108.
    11. Engström, Per & Forsell, Eskil, 2018. "Demand effects of consumers’ stated and revealed preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 43-61.
    12. Bonan, Jacopo & Battiston, Pietro & Bleck, Jaimie & LeMay-Boucher, Philippe & Pareglio, Stefano & Sarr, Bassirou & Tavoni, Massimo, 2021. "Social interaction and technology adoption: Experimental evidence from improved cookstoves in Mali," World Development, Elsevier, vol. 144(C).
    13. Anna K. Edenbrandt & Christian Gamborg & Bo Jellesmark Thorsen, 2020. "Observational learning in food choices: The effect of product familiarity and closeness of peers," Agribusiness, John Wiley & Sons, Ltd., vol. 36(3), pages 482-498, June.
    14. Grant Miller & A. Mushfiq Mobarak, 2015. "Learning About New Technologies Through Social Networks: Experimental Evidence on Nontraditional Stoves in Bangladesh," Marketing Science, INFORMS, vol. 34(4), pages 480-499, July.
    15. Liangfei Qiu & Zhan (Michael) Shi & Andrew B. Whinston, 2018. "Learning from Your Friends’ Check-Ins: An Empirical Study of Location-Based Social Networks," Information Systems Research, INFORMS, vol. 29(4), pages 1044-1061, December.
    16. Sushil Bikhchandani & David Hirshleifer & Omer Tamuz & Ivo Welch, 2024. "Information Cascades and Social Learning," Journal of Economic Literature, American Economic Association, vol. 62(3), pages 1040-1093, September.
    17. Ozhegov, Evgeniy M. & Sidorovykh, Aleksandra S., 2017. "Heterogeneity of sellers in housing market: Difference in pricing strategies," Journal of Housing Economics, Elsevier, vol. 37(C), pages 42-51.
    18. Juanjuan Zhang & Peng Liu, 2012. "Rational Herding in Microloan Markets," Management Science, INFORMS, vol. 58(5), pages 892-912, May.
    19. Mina Ameri & Elisabeth Honka & Ying Xie, 2019. "Word of Mouth, Observed Adoptions, and Anime-Watching Decisions: The Role of the Personal vs. the Community Network," Marketing Science, INFORMS, vol. 38(4), pages 567-583, July.
    20. , & , & ,, 2014. "Dynamics of information exchange in endogenous social networks," Theoretical Economics, Econometric Society, vol. 9(1), January.

    More about this item

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:randje:v:44:y:2013:i:2:p:337-360. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/randdus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.