ABSTRACT
This chapter focuses on how to reliably estimate the size of endowment effect, rather than how to reduce or remove endowment. It provides a brief overview of the United Kingdom (UK) housing market. The chapter focuses on tools and techniques that can be used to effectively and reliably estimate endowment effect in the housing market, such as online panel data platforms and difference-in-difference models. House prices have been increasing steadily in UK. The average house prices need to be contrasted with income statistics in order to understand the real cost of homeownership. Home purchases in the UK are typically completed through real estate agents, who facilitate the negotiations between buyers and sellers. Evidence also suggests that endowment effect is significant in declining market conditions only. This may help to create a vicious cycle during market downturns, where endowment effect could further dampen the already sluggish and illiquid housing market.
