Can the Mortensen-Pissarides model match the housing market facts?

Lisi, Gaetano (2012): Can the Mortensen-Pissarides model match the housing market facts?

Abstract

This paper examines whether the Mortensen-Pissarides matching model can account for the housing market facts, most of all the empirical anomaly known as ‘price dispersion’. Our main finding is that the model can account for the three basic facts of housing market (namely, the existence of price dispersion, the positive correlation between housing price and trading volume, and between housing price and time-on-the market), without any restrictive assumption and in a very simple framework.

• Item Type: MPRA Paper
• Language: English
• Keywords: housing price dispersion, time-on-the-market, bargaining power, search and matching frictions
• Subjects: J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J63 - Turnover ; Vacancies ; Layoffs; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R31 - Housing Supply and Markets; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R21 - Housing Demand

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