Internet Search Behavior,Liquidity and Prices in the Housing Market |
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| Authors: | Dorinth W van Dijk Marc K Francke |
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| Institution: | 1. University of Amsterdam ‐ Finance Department, Plantage Muidergracht 12, 1018 TV Amsterdam and De Nederlandsche Bank ‐ Economic Policy & Research Department, The Netherlands;2. University of Amsterdam ‐ Finance Department, Plantage Muidergracht 12, 1018 TV Amsterdam and Ortec Finance Research Center, The Netherlands |
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| Abstract: | We employ detailed internet search data to examine price and liquidity dynamics of the Dutch housing market. We show that the number of clicks on properties listed online proxies demand and the number of listed properties proxies supply. From this internet search behavior, we create a market tightness indicator and we find that this indicator Granger causes changes in both house prices and housing market liquidity. The results of a panel VAR suggest that a demand shock results in a temporary increase in liquidity and a permanent increase in prices in urban areas. This is in accordance with search and matching models. |
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