Title:  The role of experience in agency choice in Australian housing market

Speaker：Junji Xiao, Lingnan Univeristy of Hong Kong

Date：9：00-10：30, 1 April, 2021 （Beijing Time, GMT+8）

On Zoom

About the Speaker:

Junji Xiao has been an associate professor in economics at Lingnan University since 2021. He is an economist with research interest in the fields of empirical industrial organization, environmental economics and China economy. His recent work has explored such topics as the competition structure, the welfare effect of environmental policies and the vertical restraints. Before joining Lingnan University, he taught at UTS Business School, the Chinese University of Hong Kong, Fudan University and Shanghai University of Finance and Economics respectively. He was awarded the German DFG Fellowship in 2001 and Hong Kong RGC grant in 2016. His research papers have been published in such journals as International Economic Review, Review of Economics and Statistics, Journal of Industrial Economics, Journal of Economics & Management Strategy, Journal of Economic Behavior and Organization, Journal of Environmental Economics and Management, International Journal of Industrial Organization and Journal of Comparative Economics. He has also worked on commissioned projects for the State Administration for Market Regulation, China.

Abstract:

Agent quality is crucial for both sellers and buyers in real estate transactions; however, principal-agent problems exist. Using a unique panel data of individual house transactions, this paper analyses whether homeowners recognize agency problems and how they choose agencies for house sales based on information obtained through their past purchase experience. Our empirical findings suggest that realized price premia by the last agency (purchase premia), duration between purchase and sale, property type, and neighbourhood demographics all impact homeowners' choices. A premia analysis on sale transactions also suggests that choosing the same agency reduces sale premia by 0.6%, if the agency did not realize a premia during the purchase transaction. Otherwise, it is generally optimal to choose the same agency.