Seminar Vol. 125

Title: Empirical Models of Housing Search and Bargaining: Identification and Estimation

Speaker: Zhutong Gu, Peking University HSBC Business School

Time: December 28th, 2018 13:30–15:00

Venue: Conference Room 106B, Zhonghui Building (IESR, JNU College of Economics)

About the speaker:

Zhutong Gu is an Assistant Professor at Peking University HSBC Business School. His research interests include applied econometrics, empirical industrial organization, and microeconomics in general with a focus on identification and structural estimation. Before joining Peking University in 2017, he received PhD in Economics from Rutgers University-New Brunswick.

Abstract:

We study the constructive identification and estimation of home owner’s motivation to trade in a stationary home selling problem where sales prices are often negotiated and capped by list prices. We show that total number of visits together with the duration on market not only reveal important information on sellers’ reservation prices but also provide us with exogenous variation to separate unobserved housing attribute from seller heterogeneity. In particular, we show that the empirical distribution of sellers’ discount factors are nonparametrically identified given a conditional independence condition. We also propose to estimate the bargaining equation using nonparametric additive quantile regression with known censoring points. With a sample of Beijing housing transaction records, preliminary empirical evidences are provided.