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“Smarter information, smarter consumers”? Insights into the housing market

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Gong, CM 
Bao, HXH 


This study, we explores how information helps housing consumers make informed decisions and discusses potential market outcomes. Specifically, wWe analyse the interaction between the disclosure of information on property conditions and the disparity between home sellers’ willingness to accept (WTA) of home sellers and the home buyers’ willingness to pay (WTP) of home buyers. Three hypotheses are derived and validated through field experimental investigation within the property market. We find that the WTA–WTP disparity exists. The discussed policy instrument for information disclosure appears to function as expected. The release of information helps consumers adjust their judgment and estimation of future maintenance cost in the direction of true probability, reduces the time and monetary costs of searching information and corrects the high risk-premium they demand in buying resale properties. The WTA–WTP disparity is considerably reduced after information disclosure, and market liquidity and efficiency are improved. This study is an important complement to prior research on how information changes the behaviour of consumers in housing markets. Findings can inform the central government about the wide use of smart disclosure in the near future, as well as the scope, format and structure of information to be supplied to general housing consumers.



Information disclosure, WTA-WTP disparity, Nudge, Loss aversion, Housing market

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Journal of Business Research

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Elsevier BV
National Natural Science Foundation of China (Project #71231005 and #71671076) and the technical support of China Index Academy.