Information and communication technology in the real estate industry: productivity,industry structure and market efficiency

This survey of changes in the real estate industry due to information and communication technology (ICT) covers three areas: (a) A brief survey of ICT applications in the property industry, (b) speculation about implications for market structure and productivity within the real estate industry, and (c) comments on the wider macroeconomic implications of these changes. Improvements in information and productivity may lead to important long-run changes in business processes and industry structure tending to favour larger firms and promoting specialization of functions. Changing the information structure of real estate decision systems could change system dynamics and improve allocative efficiency. On the other hand, under different institutional arrangements, better information could increase the amplitude of real estate cycles and destabilize economies.     

Estimating Returns on Commercial Real Estate: A New Methodology Using Latent-Variable Models

Despite their widespreao use as benchmarks of U.S. commercial real estate returns, indexes produced by the National Council of Real Estate Investment Fiduciaries (NCREIF) are subject to measurement problems that severely impair their ability to capture the true risk–return characteristics–especially volatility–of privately held commercial real estate. We utilize latent-variable statistical methods to estimate an alternative index of privately held (unsecuritized) commercial real estate returns. Latent-variable methods have been extensively applied in the behavioral sciences and, more recently, in finance and economics. Unlike factor analysis or other unconditional statistical approaches, latent variable models allow us to extract interpretable common information about unobserved private real estate returns using the information contained in various competing measures of returns that are measured with error. We find that our latent-variable real estate return series is approximately twice as volatile as the aggregate NCREIF total return index, but less than half as volatile as the NAREIT equity index. Overall, our results strongly support the use of latent-variable statistical models in the construction of return series for commercial real estate.     

Residential Real Estate Brokerage Efficiency and the Implications of Franchising: A Bayesian Approach

This paper provides substantial evidence that real estate brokerage firms choosing to franchise are more cost-efficient than firms that remain independent. It uses 1995 cost data obtained from a nationwide survey of real estate brokerages to analyze the differences in firm efficiency across firm type—franchised and independent. We estimate a single stochastic cost frontier using Bayesian statistics and measure firm efficiency relative to that frontier conditional on firm type. The results indicate that real estate brokerages are relatively efficient, implying a competitive market, but franchised brokerages are substantially more efficient than their independent counterparts.     

Innovative Work Practices,Information Technologies,and Working Conditions: Evidence for France

We investigate the impact of new work practices and information and communication technologies (ICT) on working conditions in France. We use a unique French dataset providing information on individual workers for the year 1998. New work practices include the use of quality norms, job rotation, collective discussions on work organization, and work time flexibility. Working conditions are captured by occupational injuries as well as indicators of mental strain. We find that individuals working under the new practices face greater mental strain than individuals who do not. They also face a higher probability of work injuries, at least for benign ones. In contrast, our results suggest that ICT contribute to make the workplace more cooperative and to reduce occupational risks and injuries.     

Managing work–life boundaries with information and communication technologies: the case of independent contractors

In the light of the increasing use of information and communication technologies (ICTs), it is important to gain a better understanding of their influence on work–life boundaries. This study examines how individuals manage their work–life boundaries by using ICTs. The findings of a qualitative study with independent contractors show that individuals actively use multiple ICT‐mediated tactics to shape their temporal, spatial and psychological work–life boundaries. Furthermore, findings suggest that individuals cannot simply be classified as ‘integrators’ or ‘segmentors’, as they may have diverse preferences with regard to both the dimension (temporal, spatial or psychological) and direction (work‐to‐life or life‐to‐work) of boundary permeability. A framework that takes account of these aspects is derived based on the empirical results.     

Total factor productivity enablers in the ICT industry: A cross-country firm-level analysis

Advancements in productivity in the digital economy constitute an important engine for economic growth. What drives productivity dynamics in the information and communication technology (ICT) sector? This study examines the productivity dynamics of ICT firms across countries from the perspective of corporate balance sheets. We study the effects of intangible assets and leverage on productivity growth using firm-level panel data from five industrialized countries. We find that intangible assets positively affect the total factor productivity in the ICT sector. The positive effect of intangible assets on total factor productivity growth is larger for ICT manufacturing firms than for ICT service firms. We also find that leverage has a positive relationship with total factor productivity development in the ICT sector. In addition, our empirical results substantiated that productivity is catching up to the technological frontier. Furthermore, larger firms and/or younger firms generally show higher total factor productivity growth than their peers. Economies of scale are more prominent in the ICT service sector than in the ICT manufacturing sector. Our findings contribute to the understanding of cross-country productivity dynamics in the ICT sector at the firm level in the digital economy.     

Does ICT in schools affect residential adoption and adult utilization outside schools?

Policymakers around the world are considering whether to invest in putting information and communication technology (ICT) in schools, and how. While educational impact is likely to be the primary objective, such investments can also affect residential adoption and adult utilization of ICT in the communities, thereby reducing the digital divide. Using a census survey of Thailand for a time when ICT was available in roughly half of the nation’s schools, this study employs logistic regression and propensity score matching (PSM) to show that placing ICT in schools does have significant spill-over effects outside schools. This effect is larger for ICT in primary schools than secondary schools, and larger in schools with both Internet and computers than schools with just computers. The effects are observed in households of all incomes and educational levels. Considering these spill-over effects when allocating resources should lead to greater welfare gains for the amount of resources spent. The study also finds that there is a sizable portion of the adult population that chooses not to use ICT even after adopting this ICT in their households for their children, thereby eliminating any barriers to use related to cost and convenience. For this group, policy-makers should seek ways to decrease other impediments to ICT use, such as increasing ICT literacy through training.     

Determinants of the Rate of Return for Nonresidential Real Estate: Inflation Expectations and Market Adjustment Lags

This paper analyzes the economic forces that determine the real rate of return for nonresidential real estate. Our analysis shows that the intermarket variation in the real rate of return is statistically significant, and the rate of return differs by land use and market area, as well as over time in response to changes in macro-economic conditions. We use inflation variables as surrogates for changes in macroeconomic conditions over time. In contrast to earlier studies, we find that nonresidential real estate may not outperform expected inflation. We believe that the impact of expected inflation (and other macroeconomic variables) on real estate rates of return depends upon the interaction of the macro-environment and specific local real estate market conditions. Finally, our empirical evidence suggests that the effects of a given shock dissipate rather quickly in most markets when we take into account locational and property use differences.     

The Wage Effects of Computer Use: Evidence from WERS 2004

Computers and ICT have changed the way we live and work. The latest Workplace Employment Relations Survey (WERS) 2004 provides a snapshot of how using ICT has revolutionized the workplace. Various studies have suggested that the use of a computer at work boosted earnings by as much as 20 per cent. Others suggest this reported impact is due to unobserved heterogeneity. Using excellent data from the WERS employer–employee matched sample, we compare ordinary least squares (OLS) estimates with those from alternative estimation methods and those which include controls for workplace and occupation interactions. We show that OLS estimates overstate the return to computer use but that including occupation and workplace controls, reduces the return to around 3 per cent. We explore the return on different IT skills and find a small return to the use of the ‘office IT function’ and the intensity of computer use as measured by the number of tasks a computer is used for.     

Towards a Real Estate Land use Modeling Paradigm

This article develops a conceptual research-oriented framework for understanding how land uses are allocated in the marketplace. The analyses highlight the crucial roles that market information and transaction costs play in determining the outcomes of transactions between real estate users and suppliers and the dynamics of real estate land uses and prices.     

房地产上市公司过度投资的实证研究

房地产企业的投资问题一直是大众所关注的热点,近年来房价居高不下,政府也屡次发文对房地产企业及市场进行控制,学术界对房地产业也做了较多的研究。本文以2007年-2010年我国房地产上市公司为研究对象,在分析国内外已有研究的基础上,建立了多元线性回归模型组,采用"投资-现金流敏感性"检验的方法对过度投资进行验证。研究表明我国房地产上市公司投资行为与现金流之间存在敏感性,进一步验证了我国房地产上市公司存在过度投资行为。     

Workouts, Deep Pockets, and Fire Sales: An Analysis of Distressed Real Estate

This paper presents a conceptual analysis of issues that relate to the management of distressed real estate assets. The paper examines the decision implications of the major characteristics of real estate assets and real estate markets in the light of information and incentive problems that emerge when assets fail to perform as anticipated. The paper focuses on the determination of commitments of additional resources to a troubled property, the identification of efficient holders of distressed assets, and the consideration of policies toward the disposition of distressed assets. The paper concludes that in many instances asset sales, rather than causing further destabilization as suggested by the fire sale image, are likely to contribute to reducing the costs associated with distress.     

Online,on call: the spread of digitally organised just‐in‐time working and its implications for standard employment models

This article questions whether the dominant policy discourse, in which a normative model of standard employment is counterposed to ‘non‐standard’ or ‘atypical’ employment, enables us to capture the diversity of fluid labour markets in which work is dynamically reshaped in an interaction between different kinds of employment status and work organisation. Drawing on surveys in the UK, Germany, Sweden and the Netherlands that investigate work managed via online platforms (‘crowdwork’) and associated practices, it demonstrates that crowdwork represents part of a continuum. Not only do most crowd workers combine work for online platforms with other forms of work or income generation, but also many of the ICT‐related practices associated with crowdwork are widespread across the rest of the labour market where a growing number of workers are ‘logged’. Future research should not just focus on crowdworkers as a special case but on new patterns of work organisation in the regular workforce.     

New new technologies: the future and the present of work in information and communication technology

This paper outlines a selection of technological and organisational developments in the information and communication technology (ICT) sector and analyses their likely challenges for workers and trade unions around the globe. It addresses the convergence of telecommunications and information technology, the related developments of ubiquitous computing, ‘clouds’ and ‘big data’, and the possibilities of crowdsourcing and relates these technologies to the last decades' patterns of value chain restructuring. The paper is based on desk research of European and international sources, on sector analyses and technology forecasts by, for instance, the European Union and Organisation for Economic Co‐operation and Development, and some national actors. These prognoses are analysed through the lens of recent research into ICT working environments and ICT value chains, identifying upcoming and ongoing challenges for both workers and unions, and outlining possible research perspectives.     

An index for cross-country analysis of ICT infrastructure and access

The purpose of the present article is to devise an index for measuring and analyzing the divide among countries in the area of information and communication technology (ICT) infrastructure and access. Understanding the fact that there are many factors influencing the digital divide, this research is not intended to measure the digital divide in terms of different inequalities, but it rather attempts to take only one of the most important of these factors (maybe the most important of them) into consideration for measuring and analyzing divide between countries, that is, ICT infrastructure and access. In contrast to the majority of the indices in this context, the proposed index is built upon defining and conceptualizing ICT infrastructure and access. In addition, the index uses core ICT indicators on which the international community and experienced modelers have consensus that they measure the information society suitably. Therefore, the index can be exploited as the basis and standard for internationally comparable statistics in ICT infrastructure and access area. Moreover, it is the second index based on core ICT indicators after the Digital Opportunity Index (DOI) that was developed by the International Telecommunication Union (ITU) in 2005. However, in the current article, using Data Mining methods, Markov Chain Monte Carlo (MCMC) (to impute missing data) and Multi-Stage Factor Analysis (FA) (for aggregating the indicators), many problems and limits of the existing indices, the DOI in particular, such as the lack of data for analyzing ICT infrastructure and access, use of equal weighting or experts’ opinions to aggregate the indicators, are avoided. Since this index is developed by statistical procedures, it is flexible, adaptable, and modifiable over time while it sustains its original structure. It is comprised of two main dimensions: ‘ICT access’ and ‘coverage of mobile and access tariffs’ and 10 indicators. Finally, comparing the proposed index with the other indices in this field and gross national income (GNI) per capita of 150 countries, this index is tested; then, it is utilized to measure and analyze the divide between countries in the two dimensions, different geographical areas, economic conditions, and levels of ICT infrastructure and access.     

Do Innovative Work Practices and Use of Information and Communication Technologies Motivate Employees?

I investigate the impact of innovative work practices and information and communication technologies (ICT) use on employees’ motivations. The paper provides new and interesting results on how firms can build a motivational environment. Within an original instrumenting framework, I modify what previous analyses reveal about quality circle and training participation. The results confirm the positive role of work practices such as teamwork, quality norms, formal appraisals, management recognition, and family‐friendly policies. The ICT that most contributed to the development of a motivational environment are those that facilitate access to information and knowledge such as workflow, Internet, and e‐mail.     

Appraisal Smoothing: The Other Side of the Story

Appraisal smoothing has been widely accepted as an important factor to consider when analyzing real estate returns using appraisal-based data. In this paper, we demonstrate that the general applicability of the appraisal-smoothing arguments developed so far in the literature is limited by the assumptions upon which the arguments are based. We further show that the use of appraisal-based data can result in a higher (not lower) variance than that of true returns. Given this, it might be more fruitful to analyze the unique characteristics of real estate markets as possible explanations for the seemingly low variance observed in appraisal-based (or transaction-based) return indexes.     

Is the Information Deficiency in Real Estate Evident in Public Market Trading?

This paper examines the summary informativeness of trading in real estate securities. Prior literature on publicly traded real estate securities suggests that the information deficiency associated with local economies and unique rent dynamics will manifest itself as severe information asymmetry. To date, most studies concerned with these issues have focused on the conventional measures of liquidity (serial correlations, bid—ask spreads, etc.). However, the conventional measures have several shortcomings as pure measures of trading information. To address this issue, we use a vector autoregressive methodology pioneered by Hasbrouck. We examine the empirical proposition that information-gathering activities are related to trade informativeness. The evidence is consistent with a theoretical model in which traders are risk-averse and the number of information gatherers is small.     

An Approach to Industrial Real Estate Market Segmentation and Valuation Using the Arbitrage Pricing Paradigm

This paper investigates whether a segmented market exists for industrial real estate with respect to risk and return characteristics. Given the existence of industrial market segmentation, the next issue examined is whether a submarket perspective or an integrated real estate market orientation provides better rate of return estimates for individual industrial properties using an Arbitrage Pricing Theory (APT) framework. The results support the existence of regional markets for industrial real estate. A submarket orientation rather than an integrated perspective is also found more appropriate in predicting returns on industrial real estate.     

Portfolio Considerations in the Valuation of Real Estate

When a real asset rises in price faster than inflation (as real estate did in the late 1970s) and rises significantly in price over an extended period (as real estate has done for the last decade and one-half), it concerns valuation and investment professionals who fear about it being over-valued. One of the reasons for such price performance may be an increase in demand due to the portfolio characteristics of the asset during the period of time in question. For real estate this means the proportion included in optimal portfolios should be significant and increasing as individual tax rates increase in an environment of increasing average tax rates.
This study uses six tax brackets (0%, 10%, 20%, 30%, 40%, 50%) and portfolios consisting of three traditional assets (NYSE common stocks, corporate bonds and small stocks) plus three types of real estate (residential, business and farmland) to demonstrate that this is what has transpired in the real estate markets. Optimal portfolio weights are derived for each asset for after-tax portfolios. Real estate in general and residential real estate especially increased as a proportion of the optimal after-tax portfolio as individual tax rates increased. Other studies are used to demonstrate an environment of increasing average tax rates.