A spatiotemporal solution for the simultaneous sale price and time-on-the-market problem

Auteur(s): Dubé, Jean; Legros, Diègo
Résumé: There exists an important methodological challenge when dealing with sale price and time-on-the-market variables because both variables are simultaneously determined and related to the motivation of the sellers and buyers. Exploiting the fact that transactions occur over space and time, we propose a two-stage approach based on instrumental variables (IV) built from information collected from previous transactions. The unidirectional temporal property and the fact that other transactions are exogenous from the perspective of a single buyer or seller are exploited to evaluate the effect of the sale price on time-on-the-market, and the effect of time-on-the-market on the sale price. Based on 29,471 transactions occurring in the suburban neighborhood of Montréal (1992-2000), the results suggest that, everything else being equal, houses staying longer on the market provide negative information to the market, which results in a lower final sale price, while the final sale price is negatively related to time-on-the-market, indicating that houses of better quality (better amenities) stay less time on the market.
Type de document: Article de recherche
Date de publication: 9 octobre 2015
Date de la mise en libre accès: Accès restreint
Version du document: VoR
Lien permanent: http://hdl.handle.net/20.500.11794/1748
Ce document a été publié dans: Real Estate Economics, (2015)
https://doi.org/10.1111/1540-6229.12121
American Real Estate and Urban Economics Association
Autre version disponible: 10.1111/1540-6229.12121
Collection :Articles publiés dans des revues avec comité de lecture

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