Matching people to properties: A matching function for the housing market

• Department of Economics

Liwa Rachel Ngai, from London School of Economics, will present the paper: 'Matching People to Properties: A Matching Function for the Housing Market'

Housing markets are subject to search frictions. The matching function is a widely used tool in macroeconomics to summarise labour-market search frictions and has been estimated in an extensive literature. Limited data on home-buyers has precluded estimation of housing-market matching functions. This paper fills the gap using a novel dataset that identifies buyers and their search behaviour in viewing properties. The results support a Cobb-Douglas form with constant returns to scale. An event study based on staggered removal of restrictions on housing purchases provides causal estimates of the elasticity with respect to buyers, which is found to be around 0.5.

Co-authors: Felix Iglhaut, Kevin D. Sheedy, Fei Wu and Shuang Zhang