Hicks-Tinbergen Award 2022 Winner
The EEA congratulates the winners of the 2022 Hicks-Tinbergen Award.
Paper: Buying First or Selling First in Housing Markets (JEEA Volume 19 Issue 1)
Motiviation: This paper provides novel insights into the dynamics of house prices. It does so by modeling transaction sequences in housing markets with costly search. When housing prices rise, home switchers buy first and sell after. When housing prices fall, home switchers sell first and buy after. This leads to strategic complementarities in behaviour, multiple steady state equilibria and large fluctuations in the supply and demand of housing, which can only be absorbed by prices given fixed housing stocks. The qualitative relevance of the novel mechanism is borne out in detailed Danish data that matches property-owner data for housing transactions. In emphasising the role that the sequencing of housing transactions play, the paper makes a substantive contribution to macro and micro-orientated studies of housing markets.
Award Committee: Imran Rasul (Chair), Jan Eeckhout and Silvana Tenreyro