PT  - JOURNAL ARTICLE
AU  - Jaren C. Pope
TI  - Do Seller Disclosures Affect Property Values? Buyer Information and the Hedonic Model
AID  - 10.3368/le.84.4.551
DP  - 2008 Nov 01
TA  - Land Economics
PG  - 551--572
VI  - 84
IP  - 4
4099  - http://le.uwpress.org/content/84/4/551.short
4100  - http://le.uwpress.org/content/84/4/551.full
SO  - Land Econ2008 Nov 01; 84
AB  - The hedonic method is widely used to infer the value of environmental amenities that are bundled with real property. The interpretation of hedonic prices as marginal values requires that households are “fully informed.”Yet, there is evidence that buyers are often less informed than sellers. A graphical illustration in this study suggests that asymmetric information between buyers and sellers can affect hedonic prices. This intuition is confirmed by a quasi-random experiment that exploits spatial and information discontinuities stemming from a seller disclosure for flood zones. Results suggest a 4% decline in housing prices in flood zones after disclosures commenced. (JEL Q51, R52)