Loss Aversion and Seller Behaviour: Evidence from the Housing Market

  title={Loss Aversion and Seller Behaviour: Evidence from the Housing Market},
  author={David Genesove and C. Mayer},
  journal={CEPR Discussion Paper Series},
  • David Genesove, C. Mayer
  • Published 2001
  • Economics, Business
  • CEPR Discussion Paper Series
  • Data from downtown Boston in the 1990s show that loss aversion determines seller behavior in the housing market. Condominium owners subject to nominal losses 1) set higher asking prices of 25-35 percent of the difference between the property's expected selling price and their original purchase price; 2) attain higher selling prices of 3-18 percent of that difference; and 3) exhibit a much lower sale hazard than other sellers. The list price results are twice as large for owner-occupants as… CONTINUE READING
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