Working Paper: NBER ID: w12134
Authors: Li Gan; Qinghua Zhang
Abstract: This paper provides a search model for housing market where the number of buyers and/or sellers plays very important role. The model makes three testable predictions: (1) the unemployment rate has a negative impact on the trading volume and the sale prices of the housing market; (2) a larger housing market has a lower average sale price, shorter time-to-sale and smaller price dispersion, in addition to a lower vacancy rate. (3) In a larger housing market, when the unemployment rate goes up (or down), the sale price decreases (or increases) by a smaller percentage than in a smaller market. All three predictions are supported by a panel dataset of the Texas city-level housing markets.
Keywords: No keywords provided
JEL Codes: R0; R3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Unemployment Rate (J64) | Trading Volume (G10) |
| Unemployment Rate (J64) | Sale Prices (P22) |
| Larger Housing Market (R31) | Average Sale Price (D44) |
| Larger Housing Market (R31) | Time-to-Sale (C41) |
| Larger Housing Market (R31) | Price Dispersion (D49) |
| Larger Housing Market (R31) | Vacancy Rate (R31) |
| Unemployment Rate (J64) | Percentage Change in Sale Prices (E30) |