Accuracy of households’ dwelling valuations, housing demand and mortgage decisions: Israeli case

Koblyakova, A. ORCID: 0000-0001-9557-3693, Fleishman, L. and Furman, O., 2021. Accuracy of households’ dwelling valuations, housing demand and mortgage decisions: Israeli case. Journal of Real Estate Finance and Economics. ISSN 0895-5638

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Abstract

Housing policy, as well as academic research, are increasingly concerned with the role of bias in subjective dwelling valuations as a proximate measure of households' house price expectations and their relationship with housing demand. This paper contributes to this area of study by exploring the possibility of simultaneous relationships between households’ price expectations and incentive to maximise the size of housing services demanded also accounting for the supply side factors and regional perspective. The empirical estimation takes the form of a system of a two simultaneous equations model applying two stage least squares estimation technique. Cross sectional estimations utilise data extracted from the Israeli Longitudinal Panel Survey (LPS) data. Applying the best available proxy for households’ price expectations, calculated as the ratio between subjective dwelling valuations (LPS) and the estimated market value of the same properties, research has identified the interrelated factors that simultaneously influence householders’ price expectations and housing demand. Results offer conceptual and empirical advantages, highlighting the imperfect nature of the housing market, as reflected by the inseparability of bias in subjective valuations and housing decisions.

Item Type: Journal article
Publication Title: Journal of Real Estate Finance and Economics
Creators: Koblyakova, A., Fleishman, L. and Furman, O.
Publisher: Springer
Date: 6 March 2021
ISSN: 0895-5638
Identifiers:
NumberType
10.1007/s11146-021-09823-7DOI
1408680Other
Rights: © the author(s) 2021. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
Divisions: Schools > School of Architecture, Design and the Built Environment
Record created by: Jonathan Gallacher
Date Added: 18 Feb 2021 14:16
Last Modified: 31 May 2021 15:05
URI: http://irep.ntu.ac.uk/id/eprint/42323

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