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Is there a conspicuous consumption effect in Bucharest housing market?

Author

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  • Costin CIORA

    (Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies)

Abstract

Real estate market could have significant difference between the behavior of buyers and sellers. The recent period had showed increasing irrationality in consumption correlated with housing bubble and financial crisis. The purpose of this paper is to analyze top prices for residential properties in Bucharest and comparison with the median prices. By stating as initial hypothesis the Veblen effect of consumers, our analysis will present the actual price premium of the top 10% of transaction on a significant sample on Bucharest transactions. Through this analysis, we include conspicuous consumption as a factor of potential housing crisis.

Suggested Citation

  • Costin CIORA, 2016. "Is there a conspicuous consumption effect in Bucharest housing market?," Romanian Journal of Economics, Institute of National Economy, vol. 42(1(51)), pages 164-174, june.
    • Handle: RePEc:ine:journl:v:42:y:2016:i:51:p:164-174
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    References listed on IDEAS

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    1. Grinblatt, Mark & Keloharju, Matti & Ikäheimo, Seppo, 2003. "Interpersonal Effects in Consumption: Evidence from the Automobile Purchases of Neighbors," University of California at Los Angeles, Anderson Graduate School of Management qt69h2f7cv, Anderson Graduate School of Management, UCLA.
    2. Geoffrey K. Turnbull & Jonathan Dombrow & C.F. Sirmans, 2006. "Big House, Little House: Relative Size and Value," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 34(3), pages 439-456, September.
    3. Kwan Ok Lee & Masaki Mori, 2016. "Do Conspicuous Consumers Pay Higher Housing Premiums? Spatial and Temporal Variation in the United States," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 44(3), pages 726-763, July.
    4. Velma Zahirovic-Herbert & Swarn Chatterjee, 2011. "What is the Value of a Name? Conspicuous Consumption and House Prices," Journal of Real Estate Research, American Real Estate Society, vol. 33(1), pages 105-126.
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    More about this item

    Keywords

    conspicuous consumption; housing market; real estate market; Veblen effect;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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