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Housing and Mating Markets

By Tom W. Bell and Glen Whitman

In reading Tim Harford's article on why houses sell for more during the summer, I was struck by the similarity between his (well, Ngai and Tenreyro's) model of the housing market and my own model of the dating market. Here's Harford's description of seasonality in the housing market:

If Ngai and Tenreyro are right, then the housing market dynamic is something like this: buyers slightly prefer to buy houses in the summer, so house prices are slightly higher in the summer, so sellers prefer to put their houses on the market in the summer, and with more houses on the market, the market is thicker. That means that buyers are more likely to find the exact house they want, and so are willing to pay more; with prices higher, more sellers are attracted into the summer market, and fewer will contemplate selling in the winter. And so on. The self-reinforcing process can produce a large gap between summer and winter prices.

And here's my description of seasonality in the dating market:

[The cycle] starts with the Rite of Overdue Dumping, in which people exit relationships that they stayed in just for the holidays. And then there?s a cascade effect: the knowledge that more people are entering the singles pool encourages yet more people to exit their relationships, thus adding yet more people to the pool, etc. More dumpings take place than would be predicted by the post-holiday effect alone. ... In short, the cycle is driven by the pre-holiday and post-holiday effects, but the cycle is exaggerated ? with higher peaks and deeper troughs ? by the fact that people?s break-up decisions are interdependent. It makes most sense to break up and reenter the singles market when other people are doing the same.

Of course, Ngai and Tenreyo have actual data to support their claim, while I have nothing but anecdotal evidence. Anyone care to do the empirical work? Maybe Match.com would be the place to start.

Full post as published by Agoraphilia on September 11, 2008 (boomark / email).