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Title: A Dynamic Model of Demand for Houses and Neighborhoods

Citation Type: Miscellaneous

Publication Year: 2008

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Abstract: We use a unique data set linking information about buyers and sellers to the completecensus of housing transactions in the San Francisco metropolitan area for a period of 15 yearsto examine the microfoundations of housing market dynamics. We develop a tractable modelof neighborhood choice in a dynamic setting along with a computationally straightforwardestimation approach. This approach allows the observed and unobserved features of eachneighborhood to evolve in a completely flexible way and uses information on neighborhoodchoice and the timing of moves to recover semi-parametrically: (i) preferences for housingand neighborhood attributes, (ii) preferences regarding the performance of the house as afinancial asset (e.g., expected appreciation, volatility), and (iii) moving costs. This model andestimation approach is potentially applicable to the study a wide set of dynamic phenomenain housing markets and cities.

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Authors: Bayer, Patrick; McMillan, Robert; Timmins, Christopher; Murphy, Alvin

Publisher: Duke University

Data Collections: IPUMS USA

Topics: Methodology and Data Collection, Other

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