Does information to buyers affect the sales price of a property? Mandatory disclosure and the hedonic price model – A test on French data
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2018
- handle: 10670/1.wz8cq6
- doi: 10.24187/ecostat.2018.500t.1952
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Amélie Mauroux, « Does information to buyers affect the sales price of a property? Mandatory disclosure and the hedonic price model – A test on French data », Economie et Statistique, ID : 10.24187/ecostat.2018.500t.1952
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Résumé
Under the assumption of complete and perfect information, hedonic prices can be interpreted as marginal willingness to pay. This assumption may appear strong, especially in cases of exposure to natural risks. This assumption is tested for the French real estate market : we assess the impact of an informational shock – the implementation of the obligation to inform buyers and tenants (IAL) on 1st June 2006 – on real estate prices. If the information available to buyers was perfect, there should not be any impact. A hedonic price model is estimated in difference-in-differences, using notarial data spatially matched with maps of regulated zones covered by flood risk prevention plans. The results do not show an impact of the introduction of the IAL on the average price of the houses concerned. However, for certain categories of properties (ground floor apartments) and certain municipalities (where the housing market is the least tense, such as the so-called “recentred” Robien zone C), the estimated impact is negative and significant, a sign that not all buyers were initially in a situation of complete and perfect information.