Time-on-market in Chinese condominium presales

The condominium presale market is characterized by information asymmetry between the developer and potential buyers. A condominium developer faces conflicting incentives to sell units quickly at a lower price to generate cash and sales momentum versus to hold prices high and endure longer marketing time to maximize revenues and maintain the property’s value. We examine the pattern of marketing duration for condominium units offered for presale in a large homogeneous development in Chengdu, China using a Cox proportional hazards model. Results indicate that a patient developer may extract a price premium on units. Diminishing risk to buyers is associated with shorter marketing duration. Time-on-market is also influenced by unit and building size as well as orientation. Market conditions may moderate the speed at which units are sold

Distribution of Demand for School Quality: Evidence from Quantile Regression

Our results show that high-income families place significantly higher value on academic achievement than low-income families. High-income families are also more likely to penalize house price for non-desirable non-academic school quality. This paper uses quantile regression to examine the distribution of demand for school quality. For academic achievement, the average effects as estimated by OLS are biased toward zero due to “aggregation” of families’ willingness to pay. We take advantage of a court-ordered redistricting as a quasi-random assignment of school quality. Subdivision and school fixed-effects are used to control for unobserved characteristics

Retirement Plan Participation in the United States: Do Public Sector Employees Save More?

This study examines retirement plan participation and savings behavior for American public and private sector employees using the Panel Study of Income Dynamics (PSID) data set. This paper also examines the determinants of preference for a diversified portfolio within the retirement plans. The findings of this study indicate that the population’s plan participation increases with age, income, and education level. The public sector employees are more likely than others to participate in defined benefits plans. Conversely, they are less likely to participate in the defined contribution plans. Also, the public sector employees who participate in defined contribution plans hold lower amounts within their retirement accounts. The public sector employees are more likely to diversify their retirement portfolios or allocate them in bonds or annuities and are less likely to hold all or most of their wealth in stocks. Preference for diversification also increases with age, income and educational attainment

School Quality, House Prices, and Liquidity: The Effects of Public School Reform in Baton Rouge

After a court imposed desegregation plan ended in 1996, the Baton Rouge, Louisiana school district created neighborhood attendance zones for its schools, followed by a series of attendance zone changes. We use data from 1994 to 2002 to examine the impact of changes in school characteristics on simultaneous determination of house prices and liquidity in the market. A simultaneous equations model of sales price and tine-on-market is adopted that extends the hedonic price model by controlling for localized neighborhood market conditions. Our empirical results show that improving and declining school performance can have asymmetric capitalization effects. Further, as indicated by the search-market model, liquidity absorbs part of the capitalization of school quality; for example, declining school performance prolongs houses’ marketing time

Flood risk and housing prices

This study employs the hedonic property price method to analyze the flood risk effect on a rich set of data. The analysis is carried out on Hungary, but as the control variables are extremely elaborated, our results have general importance. The paper finds a significant reduction in housing prices accounted to ZIP code level flood risk even after controlling for a wide range of geographical and socio - economic fea tures. This paper finds that flood risk reduces housing prices substantially. It turns out that the average elasticity is driven by being in close proximity of major rivers. While riverside areas have an overall price premium in Hungary, risky areas loose this advantage to flood risk. I n ZIP code areas where the inundation depths are 10% higher, housing prices tend to be 1% lower on average plus another 1% lower along the major rivers

Some Remarks on Real Estate Pricing

This paper develops a framework for addressing the omitted variable bias that plagues most real estate research. We incorporate qualitative information from text to control for property attributes that are generally unobserved. The textual information is entered by real estate agents for every property sold on a Multiple Listing Service (MLS). The agents, who arguably have the most local market and property specific knowledge, use the unstructured text to highlight important information that is not clearly conveyed in other areas of the listing. Although the framework can be applied universally in real estate research, we demonstrate its effectiveness in the estimation of agent-owned sales premiums. Similar to previous studies, we find agent-owned premiums between 2% to 6% when no textual information is included. When we include the textual information the agent-owned premiums dissipate. The results suggest that the market distortions reported in Rutherford et al. [2005] and Levitt and Syverson [2008] do not exist

Payday Lending

A "payday loan" is a short-term loan made for seven to 30 days for a small amount. Fees charged on payday loans generally range from $15 to$30 on each $100 advanced. A typical example would be that in exchange for a$300 advance until the next payday, the borrower writes a post-dated check for $300 and receives$255 in cash -- the lender taking a $45 fee off the top. The lender then holds on to the check until the following payday, before depositing it in its own account. When the fee for a short-term payday loan is translated into an annual percentage rate, the implied annual interest rate ranges between 400 and 1000 percent. Virtually no payday loan outlets existed 15 years ago; today, there are more payday loan and check cashing stores nationwide than there are McDonald's, Burger King, Sears, J.C. Penney, and Target stores combined. For economists, several interesting issues arise in the study of payday loans: Is this just a situation in which willing customers and firms interact in the market for ready access to high-cost, short-term credit? Or does the payday loan industry encourage habitual borrowing and the snowballing of unaffordable debt in such a way that the state has a role to play in limiting consumers from their own excesses? Would a ban or overly restrictive regulations on payday lending just revive the market for loan-sharking? And what of a similar practice by mainstream banks, who regularly allow their customers to overdraw their checking accounts if they pay a fee comparable in size to a payday loan charge

Retirement Plan Participation in the United States: Do Public Sector Employees Save More?

This study examines retirement plan participation and savings behavior for American public and private sector employees using the Panel Study of Income Dynamics (PSID) data set. This paper also examines the determinants of preference for a diversified portfolio within the retirement plans. The findings of this study indicate that the population’s plan participation increases with age, income, and education level. The public sector employees are more likely than others to participate in defined benefits plans. Conversely, they are less likely to participate in the defined contribution plans. Also, the public sector employees who participate in defined contribution plans hold lower amounts within their retirement accounts. The public sector employees are more likely to diversify their retirement portfolios or allocate them in bonds or annuities and are less likely to hold all or most of their wealth in stocks. Preference for diversification also increases with age, income and educational attainment

Retirement Planning Among Middle-Aged and Older Hispanics

The goal of this study is to deepen the understanding of how middle age and older Hispanics plan for retirement, where we conducted four focus groups in the Los Angeles area with a total of 38 participants. Our study provides interesting findings, specifically for women since 84 percent of the participants were female. We find that that most participants, whether they were already retired or not, are not well prepared for retirement since they have been unable to save for retirement and have not made specific retirement plans, such as determining desired retirement age, estimating retirement budget, and collecting information about expected retirement benefits. In relation to saving on a regular basis, results were mixed. Some participants are able to save on a regular basis, but others cannot save because they live day to day. Our study contributes to the literature by showing how family experiences and religion play a significant role in retirement planning among this population. We found that the majority of the participants had parents who did not plan for retirement, and very few had parents who were able to save. We also found that many participants do now worry about retirement because they believe “God will provide.” We also found an interesting shift in relation to intergenerational transfers and family networks. While many participants help their parents, most of them do not want to ask children for help and do not expect getting help from them