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American Economic Review Vol. 104 No. 5 2014

Housing Assignment with Restrictions: Theory and Evidence from Stanford University's Campus

Tim Landvoigt1; Monika Piazzesi2; Martin Schneider2

1 Department of Finance, McCombs School of Business, The University of Texas at Austin, 2110 Speedway, Austin, TX 78712 (e-mail: ) · 2 Department of Economics, Stanford University, 579 Serra Mall, Stanford, CA 94305 (e-mail: ).

Abstract

This paper studies housing markets where a subset of houses in a restricted area is available exclusively to a subset of “eligible” buyers. An empirical part shows that houses on Stanford campus (available only to faculty) trade at substantial discounts to comparable houses off campus. The theoretical part describes an assignment model with heterogeneous houses and buyers which predicts such discounts if the matchup of quality and buyer pools is sufficiently different inside versus outside the restricted area. The restriction can distort allocations by making eligible buyers choose either higher or lower qualities than ineligible buyers with the same characteristics.

DOI
10.1257/aer.104.5.67
Volume
104
Issue
5
Pages
67-72
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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