Small initial differences yield large end-state differences

Hmmm. From The Gender Gap in Housing Returns by Paul Goldsmith-Pinkham and Kelly Shue. From the Abstract.

Housing wealth represents the dominant form of savings for American households. Using detailed data on housing transactions across the United States since 1991, we find that single men earn 1.5 percentage points higher unlevered returns per year on housing relative to single women. The gender gap grows significantly larger after accounting for mortgage borrowing: men earn 7.9 percentage points higher levered returns per year relative to women. Approximately 45% of the gap in housing returns can be explained by gender differences in the location and timing of transactions. The remaining gap arises primarily from gender differences in execution prices: data on repeat sales reveal that women buy the same property for approximately 2% more and sell for 2% less. Women experience worse execution prices because of differences in the choice of initial list price and negotiated discount relative to the list price. Gender differences in upgrade and maintenance rates, and preferences for housing characteristics and listing agents appear to be less important factors. Overall, the gender gap in housing returns is economically large and can explain 30% of the gender gap in wealth accumulation at retirement.

Like any study, skepticism is always warranted. That is a strikingly large gap (1.5 to 7.9 percentage points greater return to men over women in their real estate decision-making and execution. The authors attribute the gap to women being less aggressive negotiators. Perhaps. Men have a measurably higher disposition to aggression and risk taking so perhaps they are better positioned to bargain harder. On the other hand, 62% or residential real estate realtors are women. It would seem that that might buttress the negotiating position of female purchasers or sellers.

Or perhaps all the feminist sisterhood ethos is a smokescreen. Perhaps men and women respond to financial incentives over ideological positions.

Still. If the numbers are halfway correct, those small differences in negotiations yield pretty large retirement consequences (a difference of 30%).