XML FeedsThe Impact of Property Condition Disclosure Laws on Housing Prices: Evidence from an Event Study using Propensity Scores
By CostBenefit on Oct 17, 2008 | In General, Contaminated Properties, U.S., Real Estate Construction Housing, Academic Study/Journal Article, Hedonic Analysis, Costs and Benefits | 1 feedback »
Link: http://www.econ.uconn.edu/working/2008-39.pdf
Abstract: Anupam Nanda and Stephen L. Ross examine the impact of seller’s Property Condition Disclosure Law on the residential real estate values. A disclosure law may address the information asymmetry in housing transactions shifting of risk from buyers and brokers to the sellers and raising housing prices as a result. The authors combine propensity score techniques from the treatment effects literature with a traditional event study approach. They assemble a unique set of economic and institutional attributes for a quarterly panel of 291 US Metropolitan Statistical Areas (MSAs) and 50 US States spanning 21 years from 1984 to 2004 is used to exploit the MSA level variation in house prices. The study finds that the average seller may be able to fetch a higher price (about three to four percent) for the house if she furnishes a state-mandated seller.s property condition disclosure statement to the buyer. When they compare the results from parametric and semi-parametric event analyses, they find that the semi-parametric or the propensity score analysis generals moderately larger estimated effects of the law on housing prices.
Keywords: Property Condition Disclosure, Housing Price Index, Propensity
Score Matching, Event Study
by Anupam Nanda and Stephen L. Ross
1. Deloite Services, Mumbai
2. University of Connecticut Department of Economics; 341 Mansfield Road, Unit 1063; Storrs, CT 06269–1063; Phone: (860) 486–3022; Fax: (860) 486–4463
University of Connecticut Department of Economics www.econ.uconn.edu via REPEC www.REPEC.org
Working Paper 2008-39; September, 2008
http://www.econ.uconn.edu/working/2008-39.pdf
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