2134/36525
Cynthia Gong
Cynthia
Gong
Colin Lizieri
Colin
Lizieri
Helen X.H. Bao
Helen X.H.
Bao
“Smarter information, smarter consumers”? Insights into the housing market
Loughborough University
2019
Information disclosure
WTA–WTP disparity
Nudge
Loss aversion
Housing market
Business and Management not elsewhere classified
2019-01-10 09:26:40
Journal contribution
https://repository.lboro.ac.uk/articles/journal_contribution/_Smarter_information_smarter_consumers_Insights_into_the_housing_market/9498746
This study explores how information helps housing consumers make informed decisions and discusses potential market outcomes. We analyse the interaction between the disclosure of information on property conditions and the disparity between home sellers' willingness to accept (WTA) and home buyers' willingness to pay (WTP). Three hypotheses are derived and validated through field experimental investigation within the property market. We find that a WTA–WTP disparity exists. The identified policy instrument for information disclosure appears to function as expected. The WTA–WTP disparity is considerably reduced after information disclosure, and market liquidity and efficiency are improved. This study is an important complement to prior research on how information changes the behaviour of consumers in housing markets. Findings can inform central governments about the wider benefits of smart disclosure in the future, as well as the scope, format and structure of information supplied to general housing consumers to promote efficiency.