The real price of the ‘zero-price effect’: Study presents evidence from online classified real estate service

Researchers from Tel Aviv University found that there may be a cost to the zero-price effect: statistically identical homes that were published in free service ads on the Israeli “Yad2” online classified service received fewer clicks, sold more slowly, and at a lower price than identical homes that were published in paid service ads—adding up to an average net loss of about 3.5%–3.8% of the average transaction price. This is equivalent to about $12K–$13K, when the price of the paid service amounted to a total of about $70.

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