Abstract
In this study, we examine the impact of affinity programs on the residential real estate brokerage market. The results indicate that affinity-participating firms employ more salespeople, operate more offices, are more likely to be franchised, and have more multiple listings service affiliations than their nonparticipating counterparts. We directly test for firm and industry efficiency using a Bayesian stochastic frontier technique, and find strong evidence that non-affinity firms are much more efficient at allocating and utilizing their resources. These findings cast concerns on the industry in light of the growth of affinity programs.JEL classification: L85; C11
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