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Search And Vacancy Costs In The Tokyo Housing Market: Attempt To Measure Social Costs Of Imperfect Information

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  • Chihiro Shimizu
  • Kiyohiko G. Nishimura
  • Yasushi Asami

Abstract

The social cost of imperfect information, in terms of buyers' search costs and sellers' opportunity costs of vacancy, is estimated in the real estate market of resale condominiums in central Tokyo by using a new, comprehensive dataset of resale condominium transactions. The results suggest a substantial social cost. Specifically, if housing information were perfectly available and marketing time were null, sellers would get benefits of 22.59% of imputed net rents of their property. In addition, buyers would save 1,042,000 yen spent on search activities for one transaction, if information were perfect. This is equivalent to 13.2% of buyers' average annual income.

Suggested Citation

  • Chihiro Shimizu & Kiyohiko G. Nishimura & Yasushi Asami, 2004. "Search And Vacancy Costs In The Tokyo Housing Market: Attempt To Measure Social Costs Of Imperfect Information," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 16(3), pages 210-230, November.
    • Handle: RePEc:bla:revurb:v:16:y:2004:i:3:p:210-230
    DOI: 10.1111/j.1467-940X.2005.00088.x
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    Cited by:

    1. Shimizu, Chihiro & Nishimura, Kiyohiko G. & Watanabe, Tsutomu, 2010. "Residential rents and price rigidity: Micro structure and macro consequences," Journal of the Japanese and International Economies, Elsevier, vol. 24(2), pages 282-299, June.
    2. Takaaki Ohnishi & Takayuki Mizuno & Chihiro Shimizu & Tsutomu Watanabe, 2013. "Detecting Real Estate Bubbles: A New Approach Based on the Cross-Sectional Dispersion of Property Prices," CARF F-Series CARF-F-313, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    3. Chihiro Shimizu & Kiyohiko Nishimura, 2007. "Pricing Structure in Tokyo Metropolitan Land Markets and its Structural Changes: Pre-bubble, Bubble, and Post-bubble Periods," The Journal of Real Estate Finance and Economics, Springer, vol. 35(4), pages 475-496, November.
    4. Takaaki Ohnishi & Takayuki Mizuno & Chihiro Shimizu & Tsutomu Watanabe, 2012. "Detecting Real Estate Bubbles: A New Approach Based on the Cross-Sectional Dispersion of Property Prices," UTokyo Price Project Working Paper Series 006, University of Tokyo, Graduate School of Economics, revised Apr 2013.
    5. Kanayama, Yuki & Sadayuki, Taisuke, 2021. "What types of houses remain vacant? Evidence from a municipality in Tokyo, Japan," Journal of the Japanese and International Economies, Elsevier, vol. 62(C).
    6. Shimizu, Chihiro & Nishimura, Kiyohiko G. & Watanabe, Tsutomu, 2016. "House prices at different stages of the buying/selling process," Regional Science and Urban Economics, Elsevier, vol. 59(C), pages 37-53.
    7. Diewert, W. Erwin & Nishimura , Kiyohiko & Shimizu, Chihiro & Watanabe, Tsutomu, 2014. "Residential Property Price Indexes for Japan: An Outline of the Japanese Official RPPI," Economics working papers erwin_diewert-2014-17, Vancouver School of Economics, revised 27 Mar 2014.
    8. Shimizu Chihiro & Nishimura Kiyohiko G. & Watanabe Tsutomu, 2010. "Housing Prices in Tokyo: A Comparison of Hedonic and Repeat Sales Measures," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(6), pages 792-813, December.
    9. Chihiro Shimizu, 2014. "Estimation of Hedonic Single-Family House Price Function Considering Neighborhood Effect Variables," Sustainability, MDPI, vol. 6(5), pages 1-15, May.
    10. Masatomo Suzuki & Yasushi Asami, 2020. "Shrinking housing market, long-term vacancy, and withdrawal from housing market," Asia-Pacific Journal of Regional Science, Springer, vol. 4(3), pages 619-638, October.

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