Information, Search Efficiency, and Neighborhood Social Interactions in Residential Housing Choice.

Abstract

This thesis analyzes the residential housing choice behavior from three angles, based on the features of housing market. First, information is imperfect. I examine the behaviors between informed and uninformed households theoretically and empirically. It is found that the informed home buyers can enjoy price premium. Second, households are heterogeneous. I adopt a modified stochastic frontier approach to study the impact of households? characteristics on their search efficiency using the commercial housing transaction data in Tianjin, China. The results show that the probability of securing a good deal is higher for households with lower income, less education, lower ranks in occupation. Third, there are social interactions within a neighborhood. I propose a collective choice model to show that households? destination neighborhood choice is impacted by their current neighbors. The empirical results show that social interactions among the current neighbors significantly impact their destination neighborhood choice.