Title

Relative bargaining power of residential home traders and real estate investors

Document Type

Article

Publication Date

1-1-2021

Publication Title

Applied Economics

Volume

53

Issue

34

First Page

3962

Last Page

3971

DOI

10.1080/00036846.2021.1890685

Keywords

C21, hedonic regression, housing markets, R3, R31, real estate investment, Relative bargaining power

Abstract

This study uses a bargaining power model to examine the relative bargaining power of those who self-identify as being either residential home traders or investors, both in the Corsican housing market. In doing so, ours is the first study to measure investment advantages (disadvantages) related to property location and size. Results indicate that investors pay, on average, 6.5–10.5% more and sell, on average, for 6.5–10.5% less than those in the market for primary residences. Findings also show a significant and negative demand effect for investors. Investors are shown to gain more bargaining power as the property size increases and the distance from the sea is longer.

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