Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/219155 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8337
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
We focus on the housing market and examine why nonlocal home buyers (NLBs) pay 15 percent more for houses than local home buyers (LBs). We estimate a housing demand model that returns heterogeneous willingness to pay parameters for housing attributes. Our results show that NLBs are willing to pay more for specific housing attributes, especially for house size and school quality. We also find that gratification and reward arguments, and imperfect price information explain the price differential to a large extent. Search cost and house age arguments have an adverse effect on NLBs’ house spending.
Subjects: 
heterogeneous preferences
housing market
imperfect information on price distributions
school quality
search costs
JEL: 
L13
L49
L63
Document Type: 
Working Paper
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