Cash and Distressed House Sales Price Discounts: Dual Sample Selection Spatial Interdependence Approaches

Beginning with a hedonic price model, and then progressing to a method accounting for dual sample selectivity biases and spatial interdependence; we document (and correct for) these potential confounding biases, and produce price counterfactuals for (1) all-cash financed property, (2) distressed property, and (3) all-cash and distressed property transactions. Results provide evidence of self- selection biases with all-cash purchasers, distressed properties, and distressed and all-cash properties. Significant disparities in observed cash (?13% and ?6.5%) and distressed property discounts (?1% and ?6%) are documented in pre-and post-recessionary environments, Further, cash discounts are consistent for non-distressed transactions (?11%) during both periods; however cash discounts associated with non-distressed transactions are significantly reduced post-recession (?23.3% to ?3.7%. This attenuation is attributed to a significant increase in the relative frequency of cash purchased distressed properties post-recession, i.e., larger percentage of cash buyers. Sub-sample counterfactual tests confirm prior results, and expand our understanding of all-cash and distressed discount determinants. These results provide insight into observed time variant all-cash, and distressed property discount affect sizes.     

New evidence on the effect of belief heterogeneity on stock returns

We develop a new measure to examine the effect of the heterogeneity of beliefs among investors on stock returns. Our initial results do not support the information asymmetry hypothesis or the sidelined investor hypothesis (and thus are consistent with the unbiased prices hypothesis). However, since the first two hypotheses make opposite predictions regarding stock returns, they may both have merit but offset one another. Further analysis suggests that this is indeed the case. Overall, our results support both the information asymmetry and sidelined investor hypotheses and thus occupy middle ground in the debate on the effect of disagreement on stock returns.     

Sample Selection Approaches to Estimating and Allocating House Transaction Funding Price Differentials

The Journal of Real Estate Finance and Economics - This study examines house transaction price differentials observed among funding type combinations; accounting for potential sample selection and...     

When consumers penalize not so green products

To cash in on consumers’ willingness to pay higher prices for green products, several companies are promoting conventional products as green by highlighting a few green attributes. Through a theoretical lens, the authors investigate how consumers perceive such attempts. This research illustrates that not so green products make consumers sensitive to the monetary sacrifice associated with the purchase of such products. The current research shows that consumers have a negative attitude toward such products and they become concerned about the ethicality of the company when they encounter such products. Both implicit and explicit measures suggest that consumers notice the company's motive behind such practices which, in turn, impacts their price perceptions.     

Consuming abjection: an examination of death and disgust in the black metal scene

This paper examines abjection in the context of the extreme (black) metal scene. Moving beyond the ritual-heavy, community work that dominates much of the death-related consumption literature, our study pieces together death, violence, misanthropy, blood and social tensions to create novel insights into the consumption of disgust. Based on our interview and participant observation methodologies, we present work that explains how death-oriented consumption and abjection is manifested for some consumers and actually plays a role as an affront to mainstream orientations and the greater social order. Additionally, our work indicates that the use of abjection can be seen as a boundary and source of delineation between the “acceptable” and the “unacceptable” in society.     

Stock returns and product market competition: beyond industry concentration

The main purpose of this paper is to provide direct evidence that product market structure affects stock returns. This is not only through industry concentration, as found in Hou and Robinson (J Finance 61:1927–1956, 2006), but also based on firms’ product substitutability and industry market size. Furthermore, the predictive power of product substitutability and market size for stock returns is not subsumed by industry concentration. Our results highlight the multi-dimensional structure of product market competition and its impact on asset prices.     

The price is right? Guidelines for pricing to enhance profitability

Pricing is a key element of the marketing strategy. It does not require significant investments or resources, and is perhaps the most accessible lever to manage profitability. Even minor fluctuations in pricing can have a significant impact on both revenues and profitability. As such, lack of careful planning in pricing is a wasted opportunity. With this as a backdrop, we make a case for precision in pricing to enhance profitability. Since consumers vary in their preferences, motivations, and propensity to spend, they assign varying degrees of emphasis regarding price upon their purchase decisions. We argue that pricing is a creative exercise in math and behavioral economics, and companies should stay focused on profits. We also provide a series of guidelines for creating effective base prices, and then modifying them to enhance profitability. Finally, monitoring prices at the transaction level will reduce leakage in profits and further add to the bottom line.     

Potential foreign competition in US manufacturing

Trade barriers are falling and firms are competing in increasingly open international markets. The data reveal considerable heterogeneity across industries in the intertemporal path of import-shares. Against this backdrop, we focus on an issue that is increasingly important for competition policy analysis: ‘potential’ foreign competition. Inadequate attention to this aspect could result in a biased picture of total competition, leading to misguided antitrust decisions. Drawing on the conceptual framework outlined by Landes and Posner [Harvard Law Review, 94 (1981) 937], we measure potential foreign competition by the intertemporal response of industry import-share to industry-specific and aggregate economic factors, and our estimates indicate wide variation across industries in this dimension. A particularly striking finding is that highly concentrated industries, which are more likely to be subject to antitrust scrutiny, have a greater degree of potential foreign competition than industries with low concentration, even though the extent of actual foreign competition is similar across these groups of industries.