Learning about the Neighborhood

• 成果类型: Article
• 署名作者: Gao, Zhenyu; Sockin, Michael; Xiong, Wei
• 署名单位: Chinese University of Hong Kong; University of Texas System; University of Texas Austin; Princeton University; National Bureau of Economic Research
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa130
• 发表日期: 2021
• 页码: 4323
• 关键词: information asymmetries; social value; momentum; DYNAMICS; prices

摘要

We develop a model to analyze information aggregation and learning in housing markets. Households enter a neighborhood by buying houses and consuming each other's final goods. In the presence of pervasive informational frictions, housing prices serve as important signals to households and capital producers about the neighborhood's economic strength. Our model provides a novel amplification mechanism in which noise from housing markets propagates throughout the local economy via learning because of the complementarity in households' decisions, distorting migration into the neighborhood and the supply of capital and labor. We provide consistent evidence based on the recent U.S. housing cycle.