Publication Type

Working Paper

Publication Date

4-2016

Abstract

Using unique real estate data that allows for accurately-measured capital gains, we examine whether sell propensities and selling prices depend on an owner's capital gain. We find that sell propensities are higher and selling prices are lower for properties with a capital gain, with the sell propensities experiencing a discontinuity at a zero capital gain. Consistent with realization utility (Barberis and Xiong, 2012), larger capital gains are associated with higher sell propensities and lower selling prices. Overall, our evidence provides empirical support for realization utility, while alternative explanations such as financing constraints and informed trading cannot explain our findings.

Keywords

Real Estate, Disposition Effect, Realization Utility

Discipline

Finance and Financial Management

Research Areas

Finance

Identifier

10.2139/ssrn.2509599

Publisher

SSRN

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://doi.org/10.2139/ssrn.2509599

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