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Measuring the Cost of Imperfect Information in the Tokyo Housing Market

Author

Listed:
  • Chihiro Shimizu

    (RECRUIT Real Estate Research Institute)

  • Kiyohiko G. Nishimura

    (Faculty of Economics, University of Tokyo)

  • Yasushi Asami

    (Center for Spatial Information Science, University of Tokyo)

Abstract

The cost of imperfect information is estimated in the real estate market of resale condominiums in central Tokyo by using a new, comprehensive data set of resale condominium transactions. The results suggest a substantial cost. Specifically, if information were perfectly available and marketing time is null, sellers would get benefits of 10.58% based on average interest rate, 31.28% on gross rent and 22.59% on net rent, against imputed rent of their property. Buyers spend 1,042,000 Yen on search activities for one transaction, which would be saved if information were prefect. This cost amounts to be equivalent to 13.2% of buyers' average annual income.

Suggested Citation

  • Chihiro Shimizu & Kiyohiko G. Nishimura & Yasushi Asami, 2003. "Measuring the Cost of Imperfect Information in the Tokyo Housing Market," CIRJE F-Series CIRJE-F-238, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2003cf238
    as

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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2003/2003cf238.pdf
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    References listed on IDEAS

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    Cited by:

    1. Paul E. Carrillo, 2012. "An Empirical Stationary Equilibrium Search Model Of The Housing Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(1), pages 203-234, February.

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