Does owners’ purchase price affect rent offered? Experimental evidence

Shinichi Hirota, Kumi Suzuki-Löffelholz, Daisuke Udagawa

研究成果: Article査読

抄録

In standard economic theory, rent determines real estate price; however, we hypothesize that in behavioral economics, real estate price affects the rent offered. We conduct laboratory experiments where a real estate market opens before a rental market and examine whether owners’ purchase price influences their rent-offering behavior. We find that the higher the purchase price, the higher the rent offered. We also confirm that higher contracted rents lead to higher prices in subsequent real estate markets. This suggests a positive interaction between real estate prices and rents in the real economy, which can explain the acceleration of price increases often observed in real estate markets.

本文言語English
論文番号100260
ジャーナルJournal of Behavioral and Experimental Finance
25
DOI
出版ステータスPublished - 2020 3

ASJC Scopus subject areas

  • Finance

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