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“Smarter information, smarter consumers”? Insights into the housing market

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journal contribution
posted on 10.01.2019, 09:26 by Cynthia GongCynthia Gong, Colin Lizieri, Helen X.H. Bao
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.

Funding

The authors are grateful for the financial support of the National Natural Science Foundation of China (Project #71231005 and #71671076) and the technical support of China Index Academy.

History

School

  • Business and Economics

Department

  • Business

Published in

Journal of Business Research

Volume

97

Pages

51 - 64

Citation

GONG, C.M., LIZIERI, C. and BAO, H.X.H., 2019. “Smarter information, smarter consumers”? Insights into the housing market. Journal of Business Research, 97, pp.51-64.

Publisher

© Elsevier

Version

AM (Accepted Manuscript)

Publisher statement

This paper was accepted for publication in the journal Journal of Business Research and the definitive published version is available at https://doi.org/10.1016/j.jbusres.2018.12.036.

Acceptance date

09/12/2018

Publication date

2018-12-26

Copyright date

2018

ISSN

0148-2963

Language

en