Year of Publication

2009

Degree Name

Doctor of Philosophy (PhD)

Document Type

Dissertation

College

Arts and Sciences

Department

Economics

First Advisor

Dr. Frank Scott

Second Advisor

Dr. Aaron Yelowitz

Abstract

The first essay investigates how individual characteristics influence sales outcomes for houses they help transact. It develops hedonic housing models to assess the impacts of agent characteristics such as the level of recent and concurrent agent activity on sales outcomes (price and time on market). This is done in a Multiple Listing Service (MLS) setting using seven years of data obtained from a large Midwestern city. I find evidence that more active listing agents sell homes more quickly, though they do so to the detriment of final sales price. I also find that more listings concurrently held by agents have a statistically significant, negative effect on price. Selling agents appear to be quite neutral in the process and have little effect on either sales price or time on market.

The second essay defines market concentrations of residential real estate brokerage services across one hundred diverse U.S. markets. Since real estate is immobile, each geographical location constitutes a local market and thus national measures of market concentration, of the type espoused by the National Association of Realtors (NAR), are of little value. The only way to get a meaningful picture of the market in general is to collectively examine observations at the city/town level. Once indices of concentration are obtained, it may be possible to get a sense of minimum and maximum scale efficiencies as well as what market specific characteristics give rise to high or low concentrations.

The third essay examines the “just-below” pricing strategy in the context of home sales. Many retailers price their goods/services directly below some round amount (i.e. pricing at $2.99 instead of $3.00) and a number of studies document the effectiveness of this strategy on the demand for relatively inexpensive items (clothing, groceries, small appliances, etc). A lesser developed strand of literature examines the prevalence and effectiveness of just-below pricing in the context of larger purchases, namely real estate. This essay affirms the prevalence of just-below pricing in home transactions and finds evidence that just-below pricing can yield a higher final transaction price compared to homes initially priced on an even price point.

Included in

Economics Commons

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