Department of Economics

Faculty of Arts and Social Sciences


Seminar - Upcoming

2013 Asia Summer Institute in Behavioral Economics
Asian Meeting of the Econometric Society 2013
Past Events
Department Seminar


Modeling House Prices:  Theory and Estimation


Yu Zhu
Bank of Canada


May 30, Tue

Time: 4 - 5:30 pm
Venue: Lim Tay Boh Seminar Room (AS2 03-12)
National University of Singapore
1 Arts Link, Singapore 117570

Chair: Huang Kui


We study housing markets with price posting and either noisy or directed search. The models generate two results seen in the data: price dispersion; and price stickiness. The former means similar houses list at different prices; the latter means listings may not adjust when market conditions change, something some people find puzzling. Our setup adapts standard search theory to better fit housing, but is still very tractable. While both noisy and directed search are qualitatively consistent with various features of housing markets, only the latter matches well the empirical price distribution. We show how to identify and estimate this model, then use it it for counterfactual experiments -- e.g., predicting the impact of tighter credit on the mean and variance of house prices.