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Research Seminars & Workshops @ IRES


Dr Choi Hyun Soo
School of Business, Singapore Management University

When Real Estate is the only Game in Town


Date:

20 November 2013 (Wed)

Time:

12.30 - 2.00pm

Venue:

RMI Executive Seminar Room, Level 4, I-Cube Building


Abstract

Using data on household portfolios and mortgage originations, we find support for the hypothesis that locally-biased households residing in a city with few publicly traded firms headquartered there are more likely to own an investment home nearby. Households in these areas are also less likely to own stocks. This only-game-in-town effect is more pronounced for households living in high credit quality areas, who can access financing to afford a second home. This effect also becomes pronounced for households living in low credit quality areas after 2002 when securitization made it easier for even these households to buy second homes. Hence, cities with few local stocks have higher price-to-rent rations. Among sub-prime areas, those with few firms nearby had larger housing price run-ups.

About the Speaker

Dr Choi Hyun-Soo is Assistant Professor of Finance at the Lee Kong Chian School of Business at Singapore Management University. His research interests include real estate economics, behavioral finance and household finance. He has published in the Journal of Financial Economics. He received a Bachelor of Arts in Economics and a Bachelor of Science in Statistics from Seoul National University in 2005, and a Ph.D degree in Economics from the Princeton University in 2012.

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