We introduce a new measure of housing affordability that adjusts for normative variation in housing consumption. The new measure is computed using extensive micro-data from Israel for the 1998–2015 period. Findings suggest sharp declines in Israel quality- and consumption-adjusted...

This research applies data from a unique natural policy experiment to assess the effects of heuristics on housing decisions and public policy outcomes. The data derive from programs designed to privatize public housing in Israel. The programs provided tenants with a call (real) option to...

This paper explores the housing affordability distance to a superstar city. Affordability distance is defined in terms of the increment to household income required to consume a quality- and consumption-adjusted housing unit in a proximate superstar city. The analysis focuses on Tel Aviv,...

In contrast to most studies in the tenure choice literature, our model confronts the agent with a continuum of tenure modes combining homeownership and tenancy. In principle, the hybrid tenure mode contract, while appearing in different forms, may be detected in various real estate markets...

When there is asymmetric information regarding the quality of a traded durable asset, the informed seller might signal asset quality to prospective uninformed buyers by investing in improvements and maintenance. In contrast to Spence (1973), however, this signal is productive. We derive...

We examine empirically and theoretically the multi-period pricing pattern in the real estate market. First, in a game theoretic framework, we identify conditions for determining whether potential closing prices increase or decrease and marginally increase with time on market. Then, by observing...