Matching People to Properties: A Matching Function for the Housing Market - Rachel Ngai

Speaker:  Rachel Ngai, London School of Economics and Political Science

Location: online or at Kiel Institute for the World Economy, Chausseestraße 111, 10115 Berlin

Organizers: Kiel Institute for the World Economy, CEPR

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Abstract: 

Housing markets are subject to search frictions. The matching function is a widely used tool in

macroeconomics to summarize 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 that gap using a novel dataset identifying buyers and their

search behaviour in viewing properties. An event study based on the staggered removal of

restrictions on housing purchases provides the first causal estimation of the elasticity of matches

with respect to buyers for a constant-returns-to-scale Cobb-Douglas matching function, which is

found to be around 0.5.