Sale Price, Marketing Time, and Limited Service Listings: The Influence of Home Value and Market Conditions

Local markets for real estate brokerage services typically exhibit fairly strict pricing. Increased popularity of limited service brokerages provides an opportunity to study any loss in utility by sellers using these firms. Anecdotal evidence suggests that sellers experience a decreased selling price or an increased marketing time when utilizing limited service brokers, but there has been little prior empirical work. This study finds that limited service listings sell for significantly more and spend significantly less time on the market than traditional listings. The price and marketing time impacts vary by home value and local market conditions.

AN ANALYSIS OF VALUE-ADDED AGRICULTURAL EXPORTS TO MIDDLE-INCOME DEVELOPING COUNTRIES: THE CASE OF WHEAT AND BEEF PRODUCTS

This study determined probable future directions in U.S. value-added agricultural exports to middle-income developing countries (MIDCs) under the assumption of continued income growth. Import share equations for U.S. bulk, semi-processed and value-added wheat or beef products, as a percent of total U.S. wheat or beef product exports to each MIDC, were econometrically estimated using the ordinary least squares (OLS) technique. The empirical results indicate that in most MIDCs, increases in real per capita income have negative effects on the import share of processed wheat products while having positive effects on the import share of bulk wheat. However, import shares of U.S. processed beef products are likely to increase with income growth in most MIDCs.International Relations/Trade,

Prior Debt and the Cost of Going Public

Previous studies find that firms with prior debt, particularly publicly rated, have lower information asymmetry and experience a lower opportunity cost of going public, as measured by underpricing. Subsequent research suggests that underpricing may be an inaccurate measure of indirect issuance costs. Thus, we replicate and extend existing studies to examine whether previously issued debt reduces the true opportunity cost of issuance. We find that private debt issues have little effect; however, firms with public debt (particularly rated) have both significantly lower levels of underpricing and lower issuance opportunity costs, as well as narrower filing ranges and smaller price revisions, all of which are consistent with reduced asymmetry. We find, however, that matching issues by firm size eliminates the significant relations. Thus, we conclude that although prior public debt appears to reduce information asymmetries, it is more likely a reflection of the underlying characteristics of firms with these existing securities

Cultural Influnces on Risk Tolerance and Portfolio Creation

We extend existing research that examines the impact of culture on risk tolerance. Using surveys completed by Chinese and American students, we find, consistent with previous studies, that Chinese students perceive themselves as more risk tolerant. However, we find that Chinese students are less consistent in matching their perceived tolerance levels with actual scores from a standard risk tolerance assessment. Further, we also examine mock portfolios created by the respondents and find no evidence that Chinese students create portfolios that are riskier than their American counterparts. Our findings suggest that differences in risk tolerance are at least partially a product of culture, but such differences may not always translate into actual investment decisions

REIT IPOs and the Cost of Going Public

We examine Initial Public Offerings (IPOs) of Real Estate Investment Trusts (REITs) that went public between 1986 and 2004. Consistent with previous studies, we find that REIT IPOs are associated with lower levels of underpricing relative to traditional issues. We also find that REITs are associated with smaller file price revisions. Both findings are potentially attributable to the lower level of uncertainty associated with pricing REITs. In contrast, using an alternative measure of issuance costs that incorporates the share retention decision by preexisting owners, we find no significant difference between REIT and non-REIT issues, suggesting the results of previous studies are not robust to various specifications of issuance cost and that preexisting owners do not necessarily benefit from the lower level of underpricing. Additionally, we find no difference in the issuance costs of equity versus mortgage REITs, particularly once we control for the use of umbrella partnerships

Further Examination of Equity Returns and Seasonal Depression

Seasonal Affective Disorder (SAD) induces investors to shift resources away from risky investments (such as equity) and towards safer alternatives (such as fixed income) during the Fall, while stimulating the opposite action in the Winter. Existing studies, however, fail to account for the possibility that SAD could further motivate investors to shift exposure among different subsets of equity, rather than simply across broad asset categories. We explore this possibility by examining the impact of SAD on the returns of “safe” and “risky” equity sectors (i.e., industries), as well as on equity at different levels of market capitalization. We find the SAD effect to be generally prevalent throughout all equity sectors, regardless of historical or perceived risk level, implying that there is no incremental sector reallocation. We do, however, find that SAD has a more significant impact on smaller capitalization stocks, suggesting that investors view large capitalization stocks as relatively safe investments

The Effect of Instructional Technologies on the Finance Classroom

Using a survey technique, we evaluate the effect of PowerPoint, online lecture notes, financial calculators, and machine readable forms (MRF) on students\u27 assessment of the quality of instruction, perceived knowledge level, satisfaction, post-course interest in the subject, and average grade in introductory finance courses. We also examine these opinions on a relative basis by comparing the responses of Finance majors versus non-Finance majors. The results suggest that certain technologies are received better than others and further, that the perceived quality of instructional techniques is largely contingent on the student\u27s choice of major

Seasonal Affective Disorder and the Pricing of IPOs

Purpose - It has been found that stock market returns vary seasonally with the amount of daylight, and they attribute this effect to seasonal affective disorder (SAD), which is a psychological condition that causes depression and heightened risk aversion during the fall and winter months. The goal of this study is to examine whether this effect also manifests itself in the pricing of initial public offerings (IPOs). Design/methodology/approach - The authors conduct an empirical analysis on IPO data collected over the period 1986-2000. Specifically, we examine potential pricing differences between IPO that go public during the fall and winter months, relative to other issues. The paper begins by exploring differences on a univariate basis (i.e. testing via t-statistics), subsequently extending the analysis by controlling for firm and offer characteristics in a multiple regression framework. Findings - The paper finds that IPOs experience higher levels of underpricing in both the fall and winter months and that offer price revisions are higher during the winter months. Both of these results are consistent with SAD influencing the IPO pricing process. Originality/value - The results suggest that behavioral issues (i.e. the emotions of buyers) may have as much of an effect on the pricing of IPOs as more traditional characteristics. Further, the results imply that firms with flexible issuance schedules should avoid going public during months affected by SAD, thereby potentially reducing the cost of issuance