IDEAS home Printed from https://ideas.repec.org/a/abk/jajeba/ajebasp.2011.589.595.html
   My bibliography  Save this article

Efficiency in the California Real Estate Labor Market

Author

Listed:
  • Dirk Yandell

Abstract

Problem statement: This research explores the extent of market efficiency in the real estate labor market. Given a common commission rate, areas with high average home prices will generate higher agent income per home sold. If markets are efficient with few barriers to entry, additional agents per capita would be expected in high-priced areas, but each home sale would represent a larger portion of an agent’s annual income so a risk premium should be present. Approach: Agent earnings and the number of homes sold were examined in selected California counties. The data provides details on over 200,000 transactions, for nearly 47,000 different real estate agents and brokers, with usable data for 477 distinct zip codes. Results: Results show that regions with a higher median home price have a greater number of parttime real estate agents and an increased number of agents per capita. Conclusion: There are fewer average commission events per agent in areas with higher housing prices, but a higher level of total commission earnings per agent to compensate for the added income risk per completed transaction.

Suggested Citation

  • Dirk Yandell, 2011. "Efficiency in the California Real Estate Labor Market," American Journal of Economics and Business Administration, Science Publications, vol. 3(4), pages 589-595, December.
  • Handle: RePEc:abk:jajeba:ajebasp.2011.589.595
    DOI: 10.3844/ajebasp.2011.589.595
    as

    Download full text from publisher

    File URL: https://thescipub.com/pdf/ajebasp.2011.589.595.pdf
    Download Restriction: no

    File URL: https://thescipub.com/abstract/ajebasp.2011.589.595
    Download Restriction: no

    File URL: https://libkey.io/10.3844/ajebasp.2011.589.595?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jim Clayton, 1998. "Further Evidence on Real Estate Market Efficiency," Journal of Real Estate Research, American Real Estate Society, vol. 15(1), pages 41-58.
    2. Linda L. Johnson & Christine Loucks, 1986. "The Effect of State Licensing Regulations on the Real Estate Brokerage Industry," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 14(4), pages 567-582, December.
    3. Chang-Tai Hsieh & Enrico Moretti, 2003. "Can Free Entry Be Inefficient? Fixed Commissions and Social Waste in the Real Estate Industry," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1076-1122, October.
    4. Geoffrey K. Turnbull, 1996. "Real Estate Brokers, Nonprice Competition and the Housing Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 24(3), pages 293-316, September.
    5. Thomas J. Miceli, 1992. "The Welfare Effects of Non‐Price Competition Among Real Estate Brokers," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(4), pages 519-532, December.
    6. John H. Crockett, 1982. "Competition and Efficiency in Transacting: The Case of Residential Real Estate Brokerage," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 10(2), pages 209-227, June.
    7. Jud, G Donald & Winkler, Daniel T, 2000. "A Note on Licensing and the Market for Real Estate Agents," The Journal of Real Estate Finance and Economics, Springer, vol. 21(2), pages 175-184, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jonathan Wiley & Justin Benefield & Marcus Allen, 2014. "Cyclical Determinants of Brokerage Commission Rates," The Journal of Real Estate Finance and Economics, Springer, vol. 48(1), pages 196-219, January.
    2. John D. Benjamin & G. Donald Jud & G. Stacy Sirmans, 2000. "What Do We Know About Real Estate Brokerage?," Journal of Real Estate Research, American Real Estate Society, vol. 20(1), pages 5-30.
    3. Han, Lu & Strange, William C., 2015. "The Microstructure of Housing Markets," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 813-886, Elsevier.
    4. Kerem Yavuz Arslani & Christopher Hannum & Wendy Usrey & Laurie Dufloth, 2018. "A Spatial Model for Market Concentration Measure," ERES eres2018_164, European Real Estate Society (ERES).
    5. John D. Benjamin & G. Donald Jud & G. Stacy Sirmans, 2000. "Real Estate Brokerage and the Hosting Market: An Annotated Bibliography," Journal of Real Estate Research, American Real Estate Society, vol. 20(1), pages 217-278.
    6. Marcus T. Allen & William H. Dare & Lingxiao Li, 2018. "MLS Information Sharing Intensity and Housing Market Outcomes," The Journal of Real Estate Finance and Economics, Springer, vol. 57(2), pages 297-313, August.
    7. David Barker, 2008. "Ethics and Lobbying: The Case of Real Estate Brokerage," Journal of Business Ethics, Springer, vol. 80(1), pages 23-35, June.
    8. Randy I. Anderson & Robert Fok & Leonard V. Zumpano & Harold W. Elder, 1998. "Measuring the Efficiency of Residential Real Estate Brokerage Firms," Journal of Real Estate Research, American Real Estate Society, vol. 16(2), pages 139-158.
    9. Thomas Miceli & Katherine Pancak & C. Sirmans, 2007. "Is the Compensation Model for Real Estate Brokers Obsolete?," The Journal of Real Estate Finance and Economics, Springer, vol. 35(1), pages 7-22, July.
    10. Chang-Tai Hsieh & Enrico Moretti, 2003. "Can Free Entry Be Inefficient? Fixed Commissions and Social Waste in the Real Estate Industry," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1076-1122, October.
    11. Hachmi Ben Ameur & Zied Ftiti & Eric Le Fur, 2024. "What can we learn from the analysis of the fine wines market efficiency?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(1), pages 703-718, January.
    12. Bruce, Donald & Santore, Rudy, 2006. "On optimal real estate commissions," Journal of Housing Economics, Elsevier, vol. 15(2), pages 156-166, June.
    13. T.L. Tyler Yang & Joseph W. Trefzger & Lawrence F. Sherman, 1997. "A Microeconomic Study of Commercial Real Estate Brokerage Firms," Journal of Real Estate Research, American Real Estate Society, vol. 13(2), pages 177-194.
    14. John D. Benjamin & Peter Chinloy & Daniel T. Winkler, 2009. "Labor Supply, Flexible Hours and Real Estate Agents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(4), pages 747-767, December.
    15. Bruce L. Gordon & Daniel T. Winkler, 2017. "The Effect of Listing Price Changes on the Selling Price of Single-Family Residential Homes," The Journal of Real Estate Finance and Economics, Springer, vol. 55(2), pages 185-215, August.
    16. Natalya Delcoure & Norm G. Miller, 2001. "The Future of the US Residential Real Estate Brokerage Industry in Light of the Internet and International Indications," ERES eres2001_147, European Real Estate Society (ERES).
    17. Sirmans, C. F. & Turnbull, Geoffrey K., 1997. "Brokerage Pricing under Competition," Journal of Urban Economics, Elsevier, vol. 41(1), pages 102-117, January.
    18. Seow Eng Ong & Davin Wang & Calvin Chua, 2023. "Disruptive Innovation and Real Estate Agency: The Disruptee Strikes Back," The Journal of Real Estate Finance and Economics, Springer, vol. 67(2), pages 287-317, August.
    19. Ku, Hyejin, 2019. "The effect of wage subsidies on piece rate workers: Evidence from the Penny Per Pound program in Florida," Journal of Development Economics, Elsevier, vol. 139(C), pages 122-134.
    20. Glenn Boyle & Graeme Guthrie & Luke Gorton, 2010. "Holding onto Your Horses: Conflicts of Interest in Asset Management," Journal of Law and Economics, University of Chicago Press, vol. 53(4), pages 689-713.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:abk:jajeba:ajebasp.2011.589.595. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jeffery Daniels (email available below). General contact details of provider: https://thescipub.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.