Abstract
GIVEN the growing urbanization of our society, it appears likely that the urban property market will command increased scholarly attention. Aside from the fact of the mere importance of this market in our modern economy, it deserves such increased attention because it seems to be so poorly understood. Of course, it is true that many of the statements defining perfect markets are applicable to this one. There are many small independent buyers and sellers, none of whom usually control the market. Participants can easily obtain good information about prices from real estate agents and classified advertising. On the other hand, the product is far from homogeneous. More important for the present purpose, this market is supposedly characterized by interdependence. Externalities are said to abound. Introspective evidence as well as informal discussions with those persons in the act of selecting housing lend support to the view that "neighborhood effects" indeed exert important influences in this market. The existence of zoning ordinances tends to indicate that society has accepted this view. Consider the following statement of Haig:
Published Version
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