TY  - JOUR
AU  - Genesove,David
AU  - Mayer,Christopher
TI  - Loss Aversion and Seller Behavior: Evidence from the Housing Market
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8143
PY  - 2001
Y2  - March 2001
UR  - http://www.nber.org/papers/w8143
L1  - http://www.nber.org/papers/w8143.pdf
N1  - Author contact info:
David Genesove
Department of Economics
Faculty of Social Sciences
Hebrew University of Jerusalem
Mount Scopus, Jerusalem 91905  ISRAEL
Tel: 972-2-5883128
Fax: 972-2-5816071
E-Mail: genesove@mscc.huji.ac.il

Christopher J. Mayer
Columbia Business School
3022 Broadway, Uris Hall #805
New York, NY 10027
Tel: 212/854-4221
Fax: 212-932-0545
E-Mail: cm310@columbia.edu
AB  - Data from downtown Boston in the 1990s show that loss aversion determines seller behavior in the housing market.  Condominium owners subject to nominal losses  1) set higher asking prices of 25-35 percent of the difference between the property's expected selling price and their original purchase price; 2) attain higher selling prices of 3-18 percent of that difference; and 3) exhibit a much lower sale hazard than other sellers.  The list price results are twice as large for owner-occupants as investors, but hold for both.  These findings are consistent with prospect theory and help explain the positive price-volume correlation in real estate markets.
ER  -