Publication Type
Journal Article
Version
publishedVersion
Publication Date
6-2022
Abstract
Using unique real estate data that allow for accurately-measured capital gains, we examine whether sell propensities depend on the magnitude of a seller's capital gain. We find that short-term sell propensities are flat over losses and increasing in gains. Consistent with their higher sell propensities, selling prices are lower for properties with larger gains. Large-sized short-term stock investments also have sell propensities that are flat over losses and increasing in gains, although the sell propensities of typical-sized short-term stock investments are V-shaped (Ben-David and Hirshleifer (2012)). Our findings provide empirical support for the realization utility theories of Barberis and Xiong (2012) as well as Ingersoll and Jin (2013).
Keywords
Real Estate, Sell Propensity, Capital Gains, Realization Utility, Disposition Effect
Discipline
Asian Studies | Finance and Financial Management | Real Estate
Research Areas
Finance
Publication
Journal of Financial and Quantitative Analysis
Volume
57
Issue
4
First Page
1486
Last Page
1528
ISSN
0022-1090
Identifier
10.1017/S0022109021000193
Publisher
Cambridge University Press
Citation
HONG, Dong; LOH, Roger; and WARACHKA, Mitch.
Do large gains make willing sellers?. (2022). Journal of Financial and Quantitative Analysis. 57, (4), 1486-1528.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5234
Copyright Owner and License
Authors / SKBI
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-Share Alike 4.0 International License.
Additional URL
https://doi.org/10.1017/S0022109021000193