Estimating bargaining power in the market for existing homes

John P. Harding, Stuart S. Rosenthal, C. F. Sirmans

Research output: Contribution to journalReview article

112 Scopus citations

Abstract

Although bargaining is common in markets for heterogeneous goods, it has largely been ignored in the hedonic literature. In a break from that tradition, we establish sufficient conditions that permit one to identify the effect of buyer and seller bargaining on hedonic models. Our model is estimated using a previously overlooked feature of the American Housing Survey that permits us to observe characteristics of both buyers and sellers. Results suggest that household wealth, gender, and other demographic traits influence bargaining power. In addition, variation in bargaining power arising from the presence of school-age children accounts for anomalous seasonal patterns reported in various widely cited indices of quality-adjusted house prices.

Original languageEnglish (US)
Pages (from-to)178-188
Number of pages11
JournalReview of Economics and Statistics
Volume85
Issue number1
DOIs
StatePublished - Feb 1 2003

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Economics and Econometrics

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