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Cited by 1,628Housing Market and EconomicsDecision-Making and Behavioral EconomicsFinancial Markets and Investment Strategies

Loss Aversion and Seller Behavior: Evidence from the Housing Market

Genesove, D., Mayer, C.·2001·The Quarterly Journal of Economics
DOI 10.1162/003355301753265561
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Abstract

Data from downtown Boston in the 1990s show that loss aversion determines seller behavior in the housing market. Condominium owners subject to nominal losses 1) set higher asking prices of 25–35 percent of the difference between the property's expected selling price and their original purchase price; 2) attain higher selling prices of 3–18 percent of that difference; and 3) exhibit a much lower sale hazard than other sellers. The list price results are twice as large for owneroccupants as investors, but hold for both. These findings suggest that sellers are averse to realizing (nominal) losses and help explain the positive price-volume correlation in real estate markets.

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Crossref · 10.1162/003355301753265561

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  • Professional sports card dealers, condominium investors (rather than owners), and experienced cab drivers show less apparent response to loss than less experienced agents.

    “Indeed, professional sports card dealers (45), condominium investors (rather than owners) (31), and experienced cab drivers (32) show less apparent response to loss than less experienced agents.”

    From Thinking like a trader selectively reduces individuals' loss aversion (2009) · cites this paper as [31]

  • Real-world data show loss-averse behavior in stock markets, pricing and purchasing of consumables and condominiums, and choice of work hours by cabdrivers.

    “This work has been supported by analyses of real world data that show similar behavior in, among other situations, stock markets (26–28), the pricing and purchasing of consumables (29, 30) and condominiums (31), and the choice of work hours by cabdrivers (32).”

    From Thinking like a trader selectively reduces individuals' loss aversion (2009) · cites this paper as [31]

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Authors
Genesove, D., & Mayer, C.
Affiliations
  • National Bureau of Economic Research (US)
  • University of Pennsylvania (US)
ORCID
Venue
The Quarterly Journal of Economics
Publisher
Oxford University Press (OUP)
Published
2001-11-01
Volume
116
Issue
4
Pages
1233-1260
ISSN
  • 0033-5533 (ISSN-L)
  • 1531-4650
DOI
10.1162/003355301753265561
OpenAlex
W2891190930
Cited by
1,628
References
11
Citations by year
2026: 71 · 2025: 64 · 2024: 88 · 2023: 51 · 2022: 88 · 2021: 75 · 2020: 69 · 2019: 85 · 2018: 84 · 2017: 75 · 2016: 77 · 2015: 83 · 2014: 97 · 2013: 80 · 2012: 88
FWCI
47.16
Type
journal article
Language
en
Open access
closed
Locations
  • The Quarterly Journal of Economics (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Housing Market and Economics
  • Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
  • Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
Keywords
loss aversion, seller behavior, housing market, condominiums, asking price, selling price, real estate investors, behavioral economics

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