Different groups of homebuyers have varying levels of information abou
t the housing market as well as different search costs. Is the housing
market efficient enough to 'protect' less informed buyers from paying
more for comparable houses? And are search cost differentials large e
nough to induce significantly different prices across types of buyers?
We examine these questions using a unique data base that allows us to
compare house price across various groups of homebuyers. Surprisingly
, the results reveal no systematic price differentials across types of
buyers in the market.