Confronting Information Asymmetries: Evidence from Real Estate Markets

There are relatively few direct tests of the economic effectsof asymmetric information because of the difficulty in identifyingexogenous information measures. We propose a novel exogenousmeasure of information based on the quality of property taxassessments in different regions and apply this to the U.S.commercial real estate market. We find strong evidence thatinformation considerations are significant. Market participantsresolve information asymmetries by purchasing nearby properties,trading properties with long income histories, and avoidingtransactions with informed professional brokers. The evidencethat the choice of financing is used to address informationconcerns is mixed and weak.     

Home Bias at Home: Local Equity Preference in Domestic Portfolios

The strong bias in favor of domestic securities is a well-documented characteristic of international investment portfolios, yet we show that the preference for investing close to home also applies to portfolios of domestic stocks. Specifically, U.S. investment managers exhibit a strong preference for locally headquartered firms, particularly small, highly levered firms that produce nontraded goods. These results suggest that asymmetric information between local and nonlocal investors may drive the preference for geographically proximate investments, and the relation between investment proximity and firm size and leverage may shed light on several well-documented asset pricing anomalies.     

Jeffrey M. Hornstein. A Nation of Realtors(R): A Cultural History of the Twentieth-Century American Middle Class. Durham, N.C.: Duke University Press, 2005. xi + 252 pp. ISBN 0-8223-3528-X, $79.95 (cloth); 0-8223-3540-9, $22.95 (paper).

For many people who study the culture of American business,a mention of real estate will conjure up Sinclair Lewis’sfictional creation George F. Babbitt, the title character ofthe 1922 novel Babbitt. I was reminded, when reading JeffreyHornstein’s A Nation of Realtors^®, that Lewis at onepoint used a different working title: "Population 300,000."Between these two titles lay the relationship between the characterof the Realtor and the community that the Realtor, and his peers,     

Health and safety aspects of thin-film photovoltaic cell manufacturing technologies

Production of thin-film photovoltaic cells entails extensive handling of toxic and flammable, or explosive materials. Large scale manufacture of these photovoltaic cells may present potential health and safety hazards to workers and the public. Hazards to occupational and public health related to the toxicity and explosiveness of several feedstock gases are evaluated and safety and control options are presented.