Working Paper: NBER ID: w27318
Authors: Steffen Andersen; Julie Marx; Kasper Meisner Nielsen; Lise Vesterlund
Abstract: We investigate negotiations over real estate and find that men secure better prices than women when negotiating to buy and sell property. However, the gender difference declines substantially when improving controls for the property’s value; and is eliminated when controlling for unobserved heterogeneity in a sample of repeated sales. Rather than evidence of gender differences in negotiation, the initial difference in prices is evidence that men and women demand different properties. Consistently we find no gender difference in the sales price secured for property inherited from a deceased parent. Provided appropriate controls men and women fare equally well when negotiating over real estate. Our study demonstrates that inference on gender differences in negotiation relies critically on controlling for the value of the negotiated item.
Keywords: gender differences; negotiation; real estate transactions
JEL Codes: J16; R30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Initial differences in prices (P22) | Reflect types of properties demanded by men and women rather than negotiation abilities (J16) |
| Men secure better prices than women (J16) | Gender difference diminishes when accounting for property value (D13) |
| No significant gender difference in sales price for inherited property (G59) | Men and women fare equally well in negotiations (C78) |
| Controlling for the value of the negotiated item (C78) | Accurate inference on gender differences in negotiation outcomes (J16) |
| Proper controls applied (C90) | Men and women achieve similar outcomes in real estate negotiations (L85) |
| Gender difference diminishes (J16) | Gender difference eliminated when controlling for unobserved heterogeneity in repeated sales (J16) |