Buyer Exuberance and Price Premium
Bibliographic Data
| ID | 10861476 |
|---|---|
| Authors | Poh Har Neo Poh Har Neo (National University of Singapore), Poh Har Neo (National University of Singapore, corresponding author), Seow Eng Ong (0000-0003-2636-1202, National University of Singapore), Seow Eng Ong Seow Eng Ong (National University of Singapore), Yong Tu (0000-0002-4581-3676, National University of Singapore), Yong Tu Yong Tu (National University of Singapore) |
| Year | 2008 |
| Volume | 45 |
| Issue | 2 |
| Pages | 331-345 |
| Publication date | 2008-02-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Urban Studies (JOURNAL) |
| Journal identifiers | ISSN: 0042-0980 • E-ISSN: 1360-063X |
| Publisher | SAGE Publications (PUBLISHER • US) |
| DOI | 10.1177/0042098007085966 |
| OpenAlex | W1598948836 |
| Language | EN |
| References cited | 30 |
It has been demonstrated that the real estate market disciplines irrational price premiums. However, the persistence of price premiums begs the question of what causes price premiums in the first place. This paper seeks to examine two explanations for price premiums—the conventional information asymmetry explanation and the buyer exuberance explanation as motivated by behavioural studies. The results show that information asymmetry explains price premiums, and this finding is robust across two sub-hypotheses tested—namely, information differences arising from market familiarity and product characteristics. In addition, we find that price premiums are also caused by buyer exuberance, specifically, exuberance arising from representativeness, purchasing power and anchoring effects
Econometrics · Economics · Financial economics · Information asymmetry · Irrational number · Market price · Microeconomics · Real estate · Representativeness heuristic · Risk premium · Decision-Making and Behavioral Economics · Economic and Environmental Valuation · Housing Market and Economics
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| Citation velocity | historical |
|---|---|
| Highly cited | No |