File Download

There are no files associated with this item.

  Links for fulltext
     (May Require Subscription)
Supplementary

Article: Liquidity and Information Asymmetry in the Real Estate Market

TitleLiquidity and Information Asymmetry in the Real Estate Market
Authors
KeywordsInformation asymmetry
Land value
Liquidity
Turnover
Issue Date2012
PublisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0895-5638
Citation
Journal Of Real Estate Finance And Economics, 2012, v. 45 n. 1, p. 49-62 How to Cite?
AbstractGeorge Akerlof's asymmetric information theory explains why lemons are rarely, if at all, transacted. We extend his theory to explain liquidity in the second-hand real estate market. The idea is to decompose real estate into two components: land and the building structure. While sellers may know more about the quality of their structures than buyers, information on land, predominantly its locational attributes, is much more transparent. Without assuming any credit constraints or loss aversion behaviour, our information asymmetry model shows that: 1) the liquidity of real estate increases with the share of its land value; 2) there is a positive relationship between real estate prices and turnover rates when land supply is more inelastic than the supply of structures; 3) the positive relationship is stronger when the land value component gets smaller; and 4) while the availability of first-hand real estate may divert demand away from the second-hand market, such a substitution effect is weaker when the land value component is large. These four implications were confirmed with panel data analysis using Hong Kong's housing transactions from 1992 to 2008 across 50 districts. © 2011 Springer Science+Business Media, LLC.
Persistent Identifierhttp://hdl.handle.net/10722/135448
ISSN
2015 Impact Factor: 0.698
2015 SCImago Journal Rankings: 1.144
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorWong, SKen_HK
dc.contributor.authorYiu, CYen_HK
dc.contributor.authorChau, KWen_HK
dc.date.accessioned2011-07-27T01:35:19Z-
dc.date.available2011-07-27T01:35:19Z-
dc.date.issued2012en_HK
dc.identifier.citationJournal Of Real Estate Finance And Economics, 2012, v. 45 n. 1, p. 49-62en_HK
dc.identifier.issn0895-5638en_HK
dc.identifier.urihttp://hdl.handle.net/10722/135448-
dc.description.abstractGeorge Akerlof's asymmetric information theory explains why lemons are rarely, if at all, transacted. We extend his theory to explain liquidity in the second-hand real estate market. The idea is to decompose real estate into two components: land and the building structure. While sellers may know more about the quality of their structures than buyers, information on land, predominantly its locational attributes, is much more transparent. Without assuming any credit constraints or loss aversion behaviour, our information asymmetry model shows that: 1) the liquidity of real estate increases with the share of its land value; 2) there is a positive relationship between real estate prices and turnover rates when land supply is more inelastic than the supply of structures; 3) the positive relationship is stronger when the land value component gets smaller; and 4) while the availability of first-hand real estate may divert demand away from the second-hand market, such a substitution effect is weaker when the land value component is large. These four implications were confirmed with panel data analysis using Hong Kong's housing transactions from 1992 to 2008 across 50 districts. © 2011 Springer Science+Business Media, LLC.en_HK
dc.languageengen_US
dc.publisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0895-5638en_HK
dc.relation.ispartofJournal of Real Estate Finance and Economicsen_HK
dc.rightsThe original publication is available at www.springerlink.com-
dc.subjectInformation asymmetryen_HK
dc.subjectLand valueen_HK
dc.subjectLiquidityen_HK
dc.subjectTurnoveren_HK
dc.titleLiquidity and Information Asymmetry in the Real Estate Marketen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0895-5638&volume=&spage=&epage=&date=2011&atitle=Liquidity+and+information+asymmetry+in+the+real+estate+market-
dc.identifier.emailWong, SK: kelvin.wong@hku.hken_HK
dc.identifier.emailYiu, CY: ecyyiu@hkucc.hku.hken_HK
dc.identifier.emailChau, KW: hrrbckw@hku.hken_HK
dc.identifier.authorityWong, SK=rp01028en_HK
dc.identifier.authorityYiu, CY=rp01035en_HK
dc.identifier.authorityChau, KW=rp00993en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1007/s11146-011-9326-zen_HK
dc.identifier.scopuseid_2-s2.0-84862622036en_HK
dc.identifier.hkuros186934en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-84862622036&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume45en_HK
dc.identifier.issue1en_HK
dc.identifier.spage49en_HK
dc.identifier.epage62en_HK
dc.identifier.isiWOS:000305403000004-
dc.publisher.placeUnited Statesen_HK
dc.identifier.scopusauthoridWong, SK=7404591021en_HK
dc.identifier.scopusauthoridYiu, CY=9248825800en_HK
dc.identifier.scopusauthoridChau, KW=24830082500en_HK
dc.identifier.citeulike9442734-

Export via OAI-PMH Interface in XML Formats


OR


Export to Other Non-XML Formats