Year: 2012
Type: report
Study design: Observational Study
Abstract: Projection bias is the tendency to overpredict the degree to which one's future tastes will resemble one's current tastes.We test for evidence of projection bias in two of the largest and most important consumer markets -the car and housing markets.Using data for more than forty million vehicle transactions and four million housing purchases, we explore the impact of the weather on purchasing decisions.We find that the choice to purchase a convertible, a 4-wheel drive, or a vehicle that is black in color is highly dependent on the weather at the time of purchase in a way that is inconsistent with classical utility theory.Similarly, we find that the hedonic value that a swimming pool and that central air add to a house is higher when the house goes under contract in the summertime compared to the wintertime.
DOI: 10.3386/w18212
Institutions: Brigham Young University, University of California, Riverside, Northwestern University, National Bureau of Economic Research, Harvard University, University of California, Santa Barbara, University of California, Los Angeles, University of Zurich, Cornell University, Yale University, University of California San Diego, University of Illinois Chicago, University of Chicago, Columbia University, University of California, Berkeley, Stanford University
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1596188979