Internet Search Behavior, Liquidity and Prices in the Housing Market

36 Pages Posted: 5 Jun 2018

See all articles by Dorinth van Dijk

Dorinth van Dijk

De Nederlandsche Bank; Massachusetts Institute of Technology (MIT)

Marc Francke

University of Amsterdam - Faculty of Economics and Business (FEB); Ortec Finance

Multiple version iconThere are 2 versions of this paper

Date Written: Summer 2018

Abstract

We employ detailed internet search data to examine price and liquidity dynamics of the Dutch housing market. We show that the number of clicks on properties listed online proxies demand and the number of listed properties proxies supply. From this internet search behavior, we create a market tightness indicator and we find that this indicator Granger causes changes in both house prices and housing market liquidity. The results of a panel VAR suggest that a demand shock results in a temporary increase in liquidity and a permanent increase in prices in urban areas. This is in accordance with search and matching models.

Suggested Citation

van Dijk, Dorinth and Francke, Marc, Internet Search Behavior, Liquidity and Prices in the Housing Market (Summer 2018). Real Estate Economics, Vol. 46, Issue 2, pp. 368-403, 2018, Available at SSRN: https://ssrn.com/abstract=3189529 or http://dx.doi.org/10.1111/1540-6229.12187

Dorinth Van Dijk (Contact Author)

De Nederlandsche Bank ( email )

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Marc Francke

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

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