Expertise Value Added in the Real Estate Market


Sebastien Gay and Allen T. Zhang. Working Paper. “Expertise Value Added in the Real Estate Market”.


We consider the effect of marketing expertise on economic transactions, with a particular focus on the real estate market. We show that even as detailed listing information becomes increasingly accessible on real estate aggregation websites, realtor expertise remains important in securing a desirable sale price. One main channel for the effects of such expertise is improving information dissemination to potential buyers through higher quality listings. We first derive a measure of quality from the informational content contained within listing photos and remarks, and find that active realtors tend to produce significantly higher quality listings. We then measure the price impact of these measures of quality and find that, even after controlling for a large spectrum of house characteristics, listing quality is associated with higher sale prices.


Revise and Resubmit, Quantitative Marketing and Economics
Last updated on 10/31/2020