<abstract xmlns="http://www.w3.org/1999/xhtml">

This paper employs the econometric models of relationships over time to evaluate the change in the unit prices of apartments on the local secondary markets in Warsaw and Szczecin, depending on various socioeconomic factors. Indicators reflecting the influence of socioeconomic aspects in these cities and the lagged values of housing prices, acting as so-called anchors in this model, were used as the independent variables.
The results obtained from this analysis indicate that it is the lagged prices of housing that have the strongest influence on the formation of price levels in the market. The study confirms the presence of the so-called price anchoring effect, which can be understood as the tendency of market participants to accept prices at levels that can be justified not only by socio-economic factors, but also by the price levels established in their minds.
The main purpose of the research presented here is to show that there is no close relationship between quoted housing prices and their objective factors. The quality of models reflecting these relationships clearly improves when lagged housing prices are introduced as the explanatory variables, which may confirm the price anchoring effect derived from behavioral economics, meaning that the heuristics of anchoring and adjustment can be applied to the analysis of the behavior of a collective of individuals - many market participants.
</abstract>

This paper employs the econometric models of relationships over time to evaluate the change in the unit prices of apartments on the local secondary markets in Warsaw and Szczecin, depending on various socioeconomic factors. Indicators reflecting the influence of socioeconomic aspects in these cities and the lagged values of housing prices, acting as so-called anchors in this model, were used as the independent variables.
The results obtained from this analysis indicate that it is the lagged prices of housing that have the strongest influence on the formation of price levels in the market. The study confirms the presence of the so-called price anchoring effect, which can be understood as the tendency of market participants to accept prices at levels that can be justified not only by socio-economic factors, but also by the price levels established in their minds.
The main purpose of the research presented here is to show that there is no close relationship between quoted housing prices and their objective factors. The quality of models reflecting these relationships clearly improves when lagged housing prices are introduced as the explanatory variables, which may confirm the price anchoring effect derived from behavioral economics, meaning that the heuristics of anchoring and adjustment can be applied to the analysis of the behavior of a collective of individuals - many market participants.

Econometric Modelling of Average Housing Prices in Local Markets and the Price Anchoring Effect

Real Estate Management and Valuation

This work is licensed under the Creative Commons Attribution 4.0 International License.

This paper employs the econometric models of relationships over time to evaluate the change in the unit prices of apartments on the local secondary markets in...

Econometric Modelling of Average Housing Prices in Local Markets and the Price Anchoring Effect

Published Online: May 22, 2024

Page range: -

Received: Nov 21, 2023

Accepted: May 15, 2024

DOI: https://doi.org/10.2478/remav-2024-0029

Keywords
econometric models of housing, prices, housing market, price anchoring, Poland

© 2024 Mariusz Doszyń et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Econometric Modelling of Average Housing Prices in Local Markets and the Price Anchoring Effect

Published Online: May 22, 2024

Page range: -

Received: Nov 21, 2023

Accepted: May 15, 2024

DOI: https://doi.org/10.2478/remav-2024-0029

Keywordseconometric models of housing, prices, housing market, price anchoring, Poland

© 2024 Mariusz Doszyń et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
econometric models of housing, prices, housing market, price anchoring, Poland