Eres : Digital Library : Works

Paper eres2014_178:
A Structural Model of Loss Aversion in the Housing Market

id eres2014_178
authors Fesselmeyer, Eric C.; Le Kien T., Seah Kiat Ying
year 2014
title A Structural Model of Loss Aversion in the Housing Market
source 21st Annual European Real Estate Society Conference in Bucharest, Romania
summary This study estimates a structural version of the Genesove and Mayer (2001)loss aversion model. Our model di ers in several ways: instead of using ahedonic regression to estimate the current expected selling price of a home, weuse MSA-speci c housing indices and include a property-speci c structuralerror term that depends on the time from the date of purchase. We estimatethe model by simulated maximum likelihood using data from the AmericanHousing Survey (AHS). The AHS is an ideal dataset for studying loss aversionas it is large, and the homes surveyed span over several boom and bustperiods. We nd strong support for loss aversion behavior. On average,homeowners over-value their homes 21% for a 10% increase in losses.
series ERES:conference
email ecsef@nus.edu.sg
more http://library.eres.org/cgi-bin/rsa98.pl?conf=ERES2014&type=session&theme=D &slot=2650
discussion No discussions. Post discussion ...
ratings
session D : Housing Markets & Economics
last changed 2014/10/21 21:51
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