The Thick Market Effect on Housing Markets Transactions

27 Pages Posted: 19 Sep 2006 Last revised: 29 Aug 2010

See all articles by Li Gan

Li Gan

Texas A&M University - Department of Economics; National Bureau of Economic Research (NBER)

Qinghua Zhang

Peking University - Guanghua School of Management

Date Written: April 2006

Abstract

This paper provides a search model for housing market where the number of buyers and/or sellers plays very important role. The model makes three testable predictions: (1) the unemployment rate has a negative impact on the trading volume and the sale prices of the housing market; (2) a larger housing market has a lower average sale price, shorter time-to-sale and smaller price dispersion, in addition to a lower vacancy rate. (3) In a larger housing market, when the unemployment rate goes up (or down), the sale price decreases (or increases) by a smaller percentage than in a smaller market. All three predictions are supported by a panel dataset of the Texas city-level housing markets.

Suggested Citation

Gan, Li and Zhang, Qinghua, The Thick Market Effect on Housing Markets Transactions (April 2006). NBER Working Paper No. w12134. Available at SSRN: https://ssrn.com/abstract=896207

Li Gan (Contact Author)

Texas A&M University - Department of Economics ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Qinghua Zhang

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
26
Abstract Views
495
PlumX Metrics