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Reference Points Spillovers: Micro-Level Evidence from Real Estate.
- Source :
- Review of Financial Studies; Nov2023, Vol. 36 Issue 11, p4636-4676, 41p
- Publication Year :
- 2023
-
Abstract
- Homeowners who originally bought when marketwide price levels were high (low) fetch high (low) sales prices and rents, even decades later. We study the propagation of reference-dependence to neighboring listings. The "spillover" reference point effect is about one-half as large as the "own" reference point effect. Neither house quality nor location appears capable of explaining the result. Using a simple model to provide empirical predictions, we find support for a competition-based mechanism. We quantify the aggregate effect of own and spillover reference point effects on aggregate prices and/or rents at the ZIP code level. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 08939454
- Volume :
- 36
- Issue :
- 11
- Database :
- Complementary Index
- Journal :
- Review of Financial Studies
- Publication Type :
- Academic Journal
- Accession number :
- 173113485
- Full Text :
- https://doi.org/10.1093/rfs/hhad037