Bargaining power and segmented markets: Evidence from rental and owner‐occupied housing

In segmented markets for heterogeneous goods, prices reflect a mixture of demand characteristics, bargaining power and market segmentation. This article integrates into the search model to investigate housing across investors owner-occupiers when investment segment is also subject rental property discount. It provides framework empirically identifying separate price effects type power. We exploit homestead exemption information identify sellers buyers as or owner-occupiers. Data from Orange County, Florida, over 2000–2012 show greater discount controlling investor than estimated in conventional manner. addition, relative not same selling an owner-occupier buying owner-occupier. The results are robust phases neighborhoods.