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Home-seekers in the housing market

Author

Listed:
  • Gaetano Lisi

    (Centro di Analisi Economica CREAtività e Motivazioni)

Abstract
This housing market matching model considers two types of home seekers: people who search for a house both in the rental and in the homeownership market, and people who only search in the homeownership market. The house-search process leads to several types of matching and in turn this implies different prices of equilibrium. Also, the house-search process connects the rental market with the homeownership market. This model is thus able to explain both the relationship between the rental price and the selling price and the price dispersion which exists in the housing market. Furthermore, this theoretical model can be used to study the impact of taxation in the two markets. Precisely, it is straightforward to show the effects of two different taxes: the tax on property sale and the tax on rental income.

Suggested Citation

  • Gaetano Lisi, 2013. "Home-seekers in the housing market," Working Papers. Serie AD 2013-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasad:2013-04
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2013-04.pdf
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    References listed on IDEAS

    as
    1. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
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    15. repec:cte:werepe:we1033 is not listed on IDEAS
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    18. Brian Petereson, 2009. "Fooled by Search: Housing Prices, Turnover and Bubbles," Caepr Working Papers 2009-004, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    rental market; homeownership market; housing prices.;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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