Housing Market Segmentation: A Finite Mixture Approach - new publication by Martin Hoesli
A new paper by GFRI's Professor Martin Hoesli explores the pricing of heterogeneous goods in the presence of market segmentation.
Hoesli and his co-authors use housing as an example. They extend the theoretical hedonic model of Rosen (1974) and show that, in the presence of market segmentation, the hedonic price line is no longer continuous or unique. Using American Housing Survey data for the Miami and Louisville metropolitan areas and a finite mixture estimation approach, they find distinct market segments based on ethnicity, race, and income.
The paper is co-authored with Steven C. Bourassa from Florida Atlantic University and Martijn Dröes from the University of Amsterdam, and has been accepted for publication in the Netherlands Economic Review.
Oct 23, 2024