A new approach for the estimation of bid-rent functions for residential location choice is proposed. The method is based on the bid-auction approach and considers that the expected maximum bid of the auction is a latent variable that can be related to observed price indicators through a...

This paper presents a dynamic equilibrium model for the real estate market. Households have stochastic behavior and compete for quasi-unique locations (real estate goods), which are assigned to the best bidder through an auction-type mechanism. The producers are modeled as maximizers of their...