Ziye Zhang: Modeling Buy-Seller in Housing Markets: A Bidding Network Perspective to Understand Market Mechanisms
Ziye Zhang is a post-doctoral fellow in the Cornell Institute for China Economic Research. He also serves as a visiting lecturer in the Department of City and Regional Planning at AAP, where he completed his Ph.D. in regional science in 2018. His dissertation explored two underdeveloped areas in housing studies: vertical variation in housing prices and buy-sellers in housing markets. His research areas include urban and regional economics, applied econometrics, agent-based modeling, and spatial analysis. Before coming to Cornell, Zhang received both his bachelor's and master's degrees from Peking University, in public policy and in regional economics respectively.
This paper focuses on modeling buy-sellers in urban housing markets. Traditional economic models treat a household in a dichotomic manner as either a buyer or a seller. However, many households buy and sell at the same time. More importantly, their buying and selling decisions are interdependent to each other. The purchase depends on a successful sale due to budget or policy restrictions; the sale relies on a successful bid to avoid renting for a living. This paper calls this type of household "buy-sellers" and shows their essential role in generating a bidding network, through which one's outcome will influence others. This paper, for the first time, develops an agent-based model with the buy-sellers. This model is employed to analyze the impact of housing purchase restriction policies — which are interpreted as a shock converting some pure buyers into buy-sellers — on market outcomes and the offset effects of home brokerage.