Can Free Entry Be Inefficient? Fixed Commissions and Social Waste in the Real Estate Industry

Article, Preprint English OPEN
Hsieh, Chang-Tai T; Moretti, Enrico;
  • Publisher: eScholarship, University of California
  • Journal: volume 111,issue 5 October,pages1,076-1,122
  • Related identifiers: doi: 10.1086/376953
  • Subject:
    • jel: jel:J4 | jel:J0

Real estate agents in the US typically charge a 6 percent commission, regardless of the price of the house sold. As a consequence, the commission fee from selling a house will differ dramatically across cities depending on the average price of housing, although the effo... View more
  • References (3)

    200000 Price of Housing

    11.5 log(Average Price of Houses in City)

    14 16 Log 6% of Value of Houses Sold in City

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