Paying for a Name? Comparing the Performance of Franchised Real Estate Brokerage Firms
This paper compares the relative performance of franchised and independent real estate brokerage firms. One problem that arises when comparing the performance of two different brokerage types is that agents may self-select into a particular type. The empirical methods used control for potential self-selection by using within-agent variation in franchise affiliation for agents who have worked for both types of brokerage firms. The results suggest that agents self-select into particular real estate brokerage types and firms. Thus, failing to account for self-selection can lead to substantial bias.
KeywordsReal estate Franchising Self selection Housing
I want to thank Glenn Blomquist, Frank Scott, Adib Bagh, Bill Hoyt, and Karen Blumenschein for all of their helpful comments and suggestions.
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