Dear colleagues, in the name of the Department of Economics, I cordially invite you to our research seminar March, 3rd, 2021, 5.30pm NOTE that the seminar starts at 5.30pm! ACHTUNG, wegen des Zeitunterschieds diesmal ausnahmsweise um 17.30Uhr! Ricardo Perez-Truglia (Haas School of Business at UC Berkeley) https://www.ocf.berkeley.edu/~pereztruglia/ <https://www.ocf.berkeley.edu/~pereztruglia/> Betting on the House: Subjective Expectations and Market Choices https://ideas.repec.org/p/nbr/nberwo/27412.html <https://ideas.repec.org/p/nbr/nberwo/27412.html> Abstract: Home price expectations play a central role in macroeconomics and finance. However, there is little direct evidence on how these expectations affect market choices. We provide the first experimental evidence based on a large-scale, high-stakes field experiment in the United States. We provided information by mail to 57,910 homeowners who recently listed their homes on the market. Collectively, these homes were worth $34 billion dollars. We randomized the information contained in the mailing to create non-deceptive, exogenous variation in the subjects’ home price expectations. We then used rich administrative data to measure the effects of these information shocks on the subject’s market choices. We find that, consistent with economic theory, higher home price expectations caused the subjects to delay selling their homes. These effects are statistically highly significant, economically large in magnitude, and robust to a number of sharp checks. Our results indicate that market choices are highly elastic to expectations: a 1 percentage point increase in home price expectations reduced the probability of selling within six months by 2.45 percentage points. Moreover, we provide evidence that this behavioral elasticity would be even higher if it were not for the presence of optimization frictions. Ricardo Perez-Truglia is Associate Professor in the Haas School of Business, UC Berkeley. His research interests are on tax compliance, charitable giving, expectations and well-being. His work featured recently in * Wall Street Journal, https://www.wsj.com/articles/the-surprising-similarity-between-charitable-an... <https://www.wsj.com/articles/the-surprising-similarity-between-charitable-and-political-giving-11602854799> * Forbes Magazine, https://www.forbes.com/sites/traversmark/2020/04/13/4-behavioral-economists-... <https://www.forbes.com/sites/traversmark/2020/04/13/4-behavioral-economists-weigh-in-on-one-important-question-what-should-people-do-with-their-coming-stimulus-checks/?sh=4d5617947d06> * Harvard Business Review, https://hbr.org/2020/01/study-schmoozing-helps-men-hurts-women <https://hbr.org/2020/01/study-schmoozing-helps-men-hurts-women> Selected publications: * Perez-Truglia, R. (2020). The Effects of Income Transparency on Well-Being: Evidence from a Natural Experiment. American Economic Review, Vol. 110 (4), pp. 1019-54 * Perez-Truglia, R. and Troiano, U. (2018). Shaming Tax Delinquents. Journal of Public Economics, Vol. 167, pp. 120-137 * Drenik, A, and Perez-Truglia, R. (2018). Sympathy for the Diligent and the Demand for Workfare. Journal of Economic Behavior and Organization, Vol. 153, pp. 77-102 * Bottan, N. and Perez-Truglia, R. (2015). Losing my Religion: The Effects of Religious Scandals on Religious Participation and Charitable Giving. Journal of Public Economics, Vol. 129, pp. 106–119 Registration for the zoom link at https://www.jku.at/en/department-of-economics/research/research-events/onlin... <https://www.jku.at/en/department-of-economics/research/research-events/online-research-seminar/> You will find the schedule for the summer term at https://www.jku.at/en/department-of-economics/research/research-events/more-... <https://www.jku.at/en/department-of-economics/research/research-events/more-details-about-the-online-economics-research-seminar/> With best regards, René Böheim -- PD René Böheim, PhD Department of Economics JOHANNES KEPLER UNIVERSITÄT LINZ Altenberger Straße 69 4040 Linz, Österreich P +43-732-2468-7369 www.econ.jku.at/boeheim <http://www.econ.jku.at/boeheim> Research: http://ideas.repec.org/e/pbh15.html <http://ideas.repec.org/e/pbh15.html>