Abstract
Despite the popular use of online advertising by marketers, little is known about its role in the real estate market. This research aims to investigate how online advertising affects the sales of new houses and explores potential contingent factors and the underlying mechanism. Based on a rich secondary data set and econometric models, we find that online advertising increases the sales of new houses, and the effect is stronger with lower housing prices, higher residential incomes, and lower-tier cities. Additionally, the mechanism is that advertising generates an impact via processes, such as lowering housing prices, attracting more immigrants, and reducing emigration. Lastly, the spillover effect of online advertising may not exist in the housing market. We discuss theoretical contributions and important implications to practitioners and policy makers.
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