The role of social media in housing market information dynamics
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It is well acknowledged in economics that people's collective information sharing behavior a ects market dynamics. In the literature, this has been called by several names, includ- ing animal spirits, herd behavior, or swarming. However, it is surprising that state of the art hedonic approaches to model housing price dynamics do not use information or in uence dissemination in the housing market as an explanatory vari- able, frequently only considering the physical and locational characteristics of dwellings to compute price indices. In this paper, we examine the statistical characteristics of social media data from Twitter on the Sydney housing market. We nd power law behaviors for both distributions of tweet- ers and websites tweeted about, showing decisively that a few big real estate players control most of the information. This work is a preliminary attempt to use data mining to urge econometric hedonic models to start considering the dynamics of distributed information on social media as an explanatory variable that can a ect or predict housing mar- ket dynamics.
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