… with such thought-provoking and innovative posts as this from Tyler Cowen on the market value of different aspects of real estate. Not surprisingly, bathrooms add considerably to the market value of the property. Tyler’s got all the links to the academic literature he’s discussing, so I won’t reproduce them here.
Interestingly, we have been in the market for a house for a couple of years, and I had the same response on Saturday when our broker came over with a set of comparables he had pulled for a house we were considering. My first reaction was not “hey, let’s see if this house is worth the money”, but rather “wow, if Doug can pull these data in such a short amount of time, imagine the questions you could answer with the dataset you could build!” Then I started thinking about various econometric specifications, what instruments you could use to get around the simultaneity bias in some of the variables, etc. Then my husband (figuratively) threw a glass of water at me and I regained my house-hunting senses.
But real estate data are a potentially tremendous source of information on some very important customer preferences.
Alex will also be discussing the organ shortage in a Capitol Hill Campus luncheon this coming Friday. So if you’re a Congressional staffer and you’re interested in the economics of organ donation, check it out.