Realization utility and real estate

Using unique real estate data that allows for accurately-measured capital gains, we examine whether sell propensities and selling prices depend on an owner's capital gain. We find that sell propensities are higher and selling prices are lower for properties with a capital gain, with the sell pr...

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Main Authors: HONG, Dong, LOH, Kiat Roger, WARACHKA, Mitch
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Language:English
Published: Institutional Knowledge at Singapore Management University 2016
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Online Access:https://ink.library.smu.edu.sg/lkcsb_research/5212
https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=6211&context=lkcsb_research
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spelling sg-smu-ink.lkcsb_research-62112017-08-25T02:07:57Z Realization utility and real estate HONG, Dong LOH, Kiat Roger WARACHKA, Mitch Using unique real estate data that allows for accurately-measured capital gains, we examine whether sell propensities and selling prices depend on an owner's capital gain. We find that sell propensities are higher and selling prices are lower for properties with a capital gain, with the sell propensities experiencing a discontinuity at a zero capital gain. Consistent with realization utility (Barberis and Xiong, 2012), larger capital gains are associated with higher sell propensities and lower selling prices. Overall, our evidence provides empirical support for realization utility, while alternative explanations such as financing constraints and informed trading cannot explain our findings. 2016-04-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/5212 https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=6211&context=lkcsb_research http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Real Estate Disposition Effect Realization Utility Finance and Financial Management
institution Singapore Management University
building SMU Libraries
country Singapore
collection InK@SMU
language English
topic Real Estate
Disposition Effect
Realization Utility
Finance and Financial Management
spellingShingle Real Estate
Disposition Effect
Realization Utility
Finance and Financial Management
HONG, Dong
LOH, Kiat Roger
WARACHKA, Mitch
Realization utility and real estate
description Using unique real estate data that allows for accurately-measured capital gains, we examine whether sell propensities and selling prices depend on an owner's capital gain. We find that sell propensities are higher and selling prices are lower for properties with a capital gain, with the sell propensities experiencing a discontinuity at a zero capital gain. Consistent with realization utility (Barberis and Xiong, 2012), larger capital gains are associated with higher sell propensities and lower selling prices. Overall, our evidence provides empirical support for realization utility, while alternative explanations such as financing constraints and informed trading cannot explain our findings.
format text
author HONG, Dong
LOH, Kiat Roger
WARACHKA, Mitch
author_facet HONG, Dong
LOH, Kiat Roger
WARACHKA, Mitch
author_sort HONG, Dong
title Realization utility and real estate
title_short Realization utility and real estate
title_full Realization utility and real estate
title_fullStr Realization utility and real estate
title_full_unstemmed Realization utility and real estate
title_sort realization utility and real estate
publisher Institutional Knowledge at Singapore Management University
publishDate 2016
url https://ink.library.smu.edu.sg/lkcsb_research/5212
https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=6211&context=lkcsb_research
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