NBER

Eric W. Chan

Math & Science Division
Babson College
231 Forest St.
Wellesley, MA 02457

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Babson College

NBER Working Papers and Publications

May 2020Housing Search Frictions: Evidence from Detailed Search Data and a Field Experiment
with Peter Bergman, Adam Kapor: w27209
We randomized school quality information onto the listings of a nationwide housing website for low-income families. We use this variation and data on families' search and location choices to estimate a model of housing search and neighborhood choice that incorporates imperfect information and potentially biased beliefs. We find that imperfect information and biased beliefs cause families to live in neighborhoods with lower-performing, more segregated schools. Families underestimate school quality conditional on neighborhood characteristics. If we had ignored this information problem, we would have estimated that families value school quality relative to their commute downtown by half that of the truth.

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