Working Papers

Information Asymmetry and Information on Quality in Housing Markets

I empirically show that information asymmetry among market participants leads to heterogeneous effects of public information. By exploiting a magazine’s reports on good places to live, I find that information asymmetries prevail in housing markets. The positive news has little effect on local homebuyers. Instead, the number of local buyers increases gradually before the announcement, indicating their strong information advantage. However, informationally disadvantaged out-of-town buyers strongly react to the news, so they are largely responsible for house price appreciation in the focal markets. The results do not only suggest that third-party information interventions have the potential to mitigate information asymmetries, but also underline the importance of being promptly informed in housing market.

Spatially Heterogeneous Effects of Publicity: Evidence from the Restaurant Industry in New York City

A traditional way to increase store visibility in the brick-and-mortar retail industry is to pick a location that grants a retail establishment the best visibility for a given budget. Yet recent years have witnessed increasing attention to “information visibility” in this industry because of the rapid growth in the use of information technologies. If the economic effects of information diffusion were homogeneous across locations, then it would become less optimal for retail entrepreneurs to choose traditionally favored locations. However, I find that diner responses to New York Times restaurant reviews, although significant on average, are insignificant unless the focal business is situated in a central location characterized by high customer or competitor density. These results indicate that publicity is likely to complement, but is not a substitute for, locational centrality. So for retailers offering non-tradable goods or services, an improving information environment is likely to make favored retail locations more favorable.

Geographic Proximity and Information Advantages in Housing Markets

The Dynamics of Racial Consumption Segregation

News-driven House Price Momentum

Expert Reviews and Congestion Problems (with T.J. Yoon)