February 1, 2017
- An essay titled, Riskiness of Real Estate Development: A Perspective from Urban Economics & Option Value Theory, defines a new construct for urban economic analysis which puts this conventional wisdom in a new light. The authors call the new construct, the Development Asset Value Index (DAVI). The DAVI is a value index for newly-developed properties (only) in a geographical property market.
- An article titled, Do Different Price Points Exhibit Different Investment Risk and Return Commercial Real Estate, shows that there are indeed large differences in price dynamics for different price points. These differences are suggestive of a lack of integration in the property asset market, because we find apparent differences in the risk/return relationship.
- In an article titled, Loss Aversion in the Housing Market: A New Paradigm, the authors propose a search model in a housing market which incorporates Tversky and Kahneman’s prospect value function as a special case. Our model provides a clear correspondence between each component of the prospect theory and its unique empirical implication.