The Study Of WTA-WTP In Housing Market From The Perspective Of Behavioral Economics

As the development of the real estate market in our country,it is more and more like a storage market than increasing market.Releasing the extra storage is one of the most important task in the real estate market.In addition,the second hand house become more and more important in cities,especially in metropolitans.In some downtown area the price of second-hand houses are higher than the new ones.More importantly,properties of second-hand houses are complex than new houses and there are more trading process,more complex procedures and greater risk.Therefore,it is important to study the valuation procedure by both seller and buyer in the second hand houses trading.Market experience told us when you want to make a deal in the second hand house market,it is necessary for seller and buyer to agree on the price.In the economic aspect,without tax and trading fees,people can cut a deal only when buyer's reservation price(the highest price a buyer want to pay)exceed seller's reservation price(the lowest price a seller want to sell).It is a famous research topic in behavioral economics,many researchers have found that seller's willingness to accept compensation(WTA)always exceeds buyer's willingness to pay(WTP),in another way,the disparity between WTA and WTP is exist and positive.We analyze the WTA-WTP estimates of real estate transactions from the perspective of behavioral economics and then explore whether there is WTA-WTP disparity in China's real estate market and its main factors in order to provide the basis for future market policy.We replicate the process of the real estate market's WTA-WTP disparity by a standard WTA-WTP economics experiment and explore the psychological reason for the disparity with five tools.They are:(1)attitudes,(2)feelings,(3)familiarity with the target good,(4)risk attitudes and(5)personality.The results show that there is a significant WTA-WTP disparity in estate market and its most important factor is the attitude change and loss aversion due to ownership.