Buying a house and the decision to use a real estate broker

This study examines the factors that affect the decision by home buyers to use real estate brokers and the subsequent effect this decision has on home prices. Buyers with high opportunity costs and the least amount of information about local market conditions are the most likely to use brokers; a finding consistent with the role of the real estate broker as a market intermediary. Not surprisingly, these were some of the same factors that also have a positive impact on selling price. An important finding of this study is that when selection bias is adequately controlled, the real estate broker has no appreciable, independent impact on selling price. This, in turn, suggests a nonsegmented, highly competitive housing market.     

The impact of race and other variables on the composition and value of individual portfolios

Summary and Conclusions This study indicates that socio-economic variables play an important role in the determination of portfolio allocation and the value of assets in the portfolio. However, it should be noted that these factors are not sole determinants. Relevant variables, such as expectations and attitudes, have not been considered here, although where other variables have been studied, no definitive results were stated.15 Importantly, race is a significant determinant of portfolio diversity but not of the value of assets in the portfolio. Therefore, it does make a difference in portfolio composition whether an individual is black or white, but if the individual maintains a diversified portfolio, race becomes immaterial.     

Dividend reinvestment plans and Pecking Order capital structure behavior: An empirical investigation

Due to the asymmetric information effect, corporations have been reluctant to use external sources of equity capital. The adoption of dividend reinvestment plans (DRP) by large numbers of firms may indicate an alternative way to raise external equity funds. It has been shown that many factors may explain a firm’s decision concerning the source of the shares made available to DRP participants. The hypothesis to be tested is that the nature of the DRP actually selected may be predicted by financial characteristics such as cash flow generation, investment needs, historical dividend policy, firm ownership structure and firm capital structure. Using logistic regression analysis, results of joint tests of financial variables suggested by the Pecking Order Theory of capital structure indicate significant support for the hypothesis. Specifically, ownership structure, historical dividend policy and debt ratio are found to be key determinants of the type of DRP utilized.     

Buyer Search Intensity and the Role of the Residential Real Estate Broker

This study examines the impact of the real estate broker on the effectiveness of buyer search by focusing on the linkages between search intensity and the duration of search. How long a buyer searches depends on how sensitive the buyer is to within-period search costs and across-period, sequential search costs. High-income individuals and other homebuyers with high within-period search costs tend to search longer and less intensively. Buyers with high across-period search costs, such as out-of-town buyers, tend to search more intensively. Brokers, by reducing the opportunity costs of within-period search, increase buyer search intensity, which in turn reduces actual search time.     

Guest Editors' Introduction

Journal of Productivity Analysis -