Past Experiences and Investment Decisions: Evidence from Real Estate Markets
| Autor: | Brent W. Ambrose, Lily Shen |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
Economics and Econometrics
050208 finance Natural experiment Exploit business.industry Financial economics 05 social sciences Real estate Bayesian inference Boom Urban Studies Investment decisions Willingness to pay Accounting 0502 economics and business 050207 economics business Finance Financial services Market conditions |
| Zdroj: | The Journal of Real Estate Finance and Economics. 66:300-326 |
| ISSN: | 1573-045X 0895-5638 |
| DOI: | 10.1007/s11146-021-09844-2 |
| Popis: | This paper investigates how market participants form risk perspectives through a sequence of information shocks. Guided by a theoretical Bayesian learning model, we exploit a natural experiment afforded by the fracking boom in Pennsylvania in the late-2000s. We empirically examine whether familiarity with historical conventional gas explorations affects home-buyers’ willingness to pay for houses near fracking wells. We find the local real estate market is very efficient with home buyers rapidly collecting and processing market-relevant new information. We also find that buyers discount historical events and rely on current information to estimate the risk of a change in market conditions. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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