Do laws influence the cost of real estate brokerage services? A state fixed effects approach

Nanda, A., Clapp, J. M. and Pancak, K. A. (2016) Do laws influence the cost of real estate brokerage services? A state fixed effects approach. Real Estate Economics, 44 (4). pp. 918-967. ISSN 1540-6229 doi: 10.1111/1540-6229.12124

Abstract/Summary

A FTC-DOJ study argues that state laws and regulations may inhibit the unbundling of real estate brokerage services in response to new technology. Our data show that 18 states have changed laws in ways that promote unbundling since 2000. We model brokerage costs as measured by number of agents in a state-level annual panel vector autoregressive framework, a novel way of analyzing wasteful competition. Our findings support a positive relationship between brokerage costs and lagged house price and transactions. We find that change in full-service brokers responds negatively (by well over two percentage points per year) to legal changes facilitating unbundling

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/43159
Item Type	Article
Refereed	Yes
Divisions	Henley Business School > Real Estate and Planning
Publisher	Wiley
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