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Improved information shock and price dispersion: A natural experiment in the housing market

Author

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  • Ben-Shahar, Danny
  • Golan, Roni

Abstract

This study employs data from a natural experiment to assess the effect of an improved price information shock on subsequent real estate transaction price dispersion. While transaction data in the Israeli real estate market had not previously been available to the public, in 2010 an Israeli court ordered the Israel Tax Authority to post all real estate transaction data on its website. We employ all housing transactions in the period prior and subsequent to this event to assess its effect on housing price dispersion. Results provide evidence of significant decrease in the dispersion of quality-adjusted prices. Further, we find evidence that the information shock effect on price dispersion varies with household and market characteristics.

Suggested Citation

  • Ben-Shahar, Danny & Golan, Roni, 2019. "Improved information shock and price dispersion: A natural experiment in the housing market," Journal of Urban Economics, Elsevier, vol. 112(C), pages 70-84.
    • Handle: RePEc:eee:juecon:v:112:y:2019:i:c:p:70-84
    DOI: 10.1016/j.jue.2019.05.008
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    Citations

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    Cited by:

    1. Geoff Boeing, 2020. "Online rental housing market representation and the digital reproduction of urban inequality," Environment and Planning A, , vol. 52(2), pages 449-468, March.
    2. Ben-Shahar, Danny & Golan, Roni, 2022. "Price dispersion and time-on-market in the housing market," Journal of Housing Economics, Elsevier, vol. 58(PB).
    3. Beenstock Michael & Felsenstein Daniel, 2021. "Freedom of Information and Personal Confidentiality in Spatial COVID-19 Data," Journal of Official Statistics, Sciendo, vol. 37(4), pages 791-809, December.
    4. Daniel Broxterman & Tingyu Zhou, 2023. "Information Frictions in Real Estate Markets: Recent Evidence and Issues," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 203-298, February.

    More about this item

    Keywords

    Price dispersion; Information; Real estate; Market characteristics;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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