SFeDu

Behavioral aspects of the real estate shadow market

TERRA ECONOMICUS, , Vol. 11 (no. 2.3),
p. 9-15

The article discusses the financial and behavioral interpretation of the existence of the shadow of the residential property markets and provides an explanation of the nature of such in-vestments. Sociological data show that financial constraint is available from the housing show only 44.4% (of respondents USA, EU) and 25.1% (modeling, the situation on the local market of Russia - Rostov region) the reasons for the refusal from sales of own responsibility, and three documented behavioral reasons account for a large part of such refusals. Because the demographic characteristics of the respondents may have a significant impact on the shadow markets, the work they were has-optimized as additions to the three behavioral reasons.


Keywords: residential investment; shadow market; financing housing investment; cognitive errors investors; «awareness»; «deviation towards the status quo»; «false benchmarks»

References:
  • Bandura A. (1999). Moral Disengagement in the Perpetration of Inhumanities // Personality and Social Psychology Review, No. 3, pp. 193–209.
  • Bokhari S., Geltner D. (2011). Loss Aversion and Anchoring in Commercial Real Estate Pricing: Empirical Evidence and Price Index Implications // Real Estate Economics, No. 2, pp. 62-74.
  • Cao H., Han B, Hirshleifer D, Zhang H. (2007.) Fear of the Unknown: Familiarity and Economic Decisions // Working paper, University of California, Irvine, No. 4, pp. 12-22.
  • Colvin C., Block J., Funder D. (1995). Overly Positive Self-Evaluations and Personality: Negative Implications for Mental Health // Journal of Personality and Social Psychology, No. 6, pp. 1152–1162.
  • Einio M., Kaustia M., Puttonen V. (2008) Price Setting and the Reluctance to Realize Losses in Apartment Markets // Journal of Economic Psychology, No. 29, pp. 19–34.
  • Genesove D., Mayer C. (2001). Loss Aversion and Seller Behavior: Evidence from the Housing Market // Quarterly Journal of Economics, No. 4, pp. 1233–1260.
  • Gonzalez-Navarro M., Quintana-Domeque C. (2009). The Reliability of Self-Reported Home Values in a Developing Country Context // Journal of Housing Economics, No. 18, pp. 311–324.
  • Kaustia M., Alho E., Puttonen V. (2008). How Much Does Expertise Reduce Behavioral Biases? The Case of Anchoring Effects in Stock Return Estimates // Financial Management, No. 37, pp. 391–411.
  • Lane M., Seiler M., Seiler V. (2012). Identifying Behavioral Explanations for a Subset of the Real Estate Shadow Market // Journal of Housing Research, No. 20, pp. 191-211.
  • Samuelson W., Zeckhauser R. (1988). Status Quo Bias in Decision Making // Journal of Risk and Uncertainty, No. 1, pp. 7–59.
  • Seiler M., Seiler V., Traub S., Harrison D (2008). Regret Aversion and False Reference Points in Residential Real Estate // Journal of Real Estate Research, No. 30, pp. 461–74.
Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606