Wednesday, June 27, 2018 | 2:00pm-3:30pm | Room 335, HSBC Business School Buildin

Abstract

Using a quasi-experimental setting of two similar properties listed only $100 apart, but with a different left digit, we document that properties listed with smaller left digits are 3.8% more likely to sell, stay 5% fewer days on market, and sell for 0.1% more. Additionally, buyers of these homes are more likely to have a lower credit score, lower income, higher leverage and pay a higher interest rate on their mortgage, resell for a lower rate of return, and are more sluggish in refinancing their mortgages. Our results highlight how behavioral biases can affect even high-value purchases such as housing.