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We present and expand existing theories about why individuals may assess positive outcomes differently from negative outcomes in intertemporal choices. All of our theories—based on utility or cost considerations – predict a conventional magnitude effect for positive outcomes, that is, a negative relation between outcome size and subjective discount rates. For negative outcomes, however, implications are different for utility- and cost-based approaches. We argue that the relevance of utility-based aspects is strengthened in a money frame, leading to a conventional magnitude effect even for negative outcomes, whereas cost-based considerations gain in importance in an interest rate frame, implying, in contrast, a “reverse” magnitude effect, that is, higher discount rates for (absolutely) higher outcome size. A web-based experiment with 676 participants confirms our theoretical findings: the conventional magnitude effect prevails for positive outcomes in the money and the interest rate frame and negative outcomes in the money frame. However, there is a reverse magnitude effect for negative outcomes in the interest rate frame. Our results might help to better understand prevailing magnitude effects in practical applications and might also be apt to derive suggestions for better designing of intertemporal decision problems., QC 20240624

This study analyzes the return-risk metrics of real estate security tokens as digital representatives of fractional ownership in physical properties. The author uses approximately 40,000 pricing data points for 180 tokenized properties in the United States between 2019 and 2022 to construct a monthly index. This index is used in various analyses to see whether the tokens ' returns follow the performance of the underlying markets for housing, securitized real estate, stock, and cryptocurrency. The token index shows no clear pattern of similarity to other asset classes and has its own return-risk pattern. The principal component analysis shows that debt and macroeconomic factors are the major drivers and that the crypto market and housing market are of minor importance in explaining variation in returns. This absence of a clear linear relationship with other assets makes real estate tokens attractive as diversifiers in a multiasset portfolio. However, investors looking for an alternative investment vehicle for the real estate asset class cannot rely on tokenized real estate., QC 20240222

Different industries exhibit significantly different leverage; companies in the real estate investment trust (REIT) and technology/hardware sectors are extreme examples. In the United States, the leverage ratio is twice as high for REITs (50%) as compared to non-real-estate firms (around 25%), and the technology/hardware sector has the lowest ratio (around 17%). We theoretically and empirically analyze their differences. By decomposing the difference into three channels, we find that the industry-specific channel explains around 67% for REITs and 68% for technology/hardware firms; the value-based channel is mostly responsible for the remaining portion. Taking the nonlinear influences of extreme values into account, the relevance of the industry-specific channel is considerably reduced., QC 20240702

Tokens, the digital form of assets, are an innovation that has the potential to disrupt how to transfer and own financial instruments. We hand-collected data on 173 real estate tokens in the USA between 2019 and 2021 and trace back 238,433 blockchain transactions. We find that tokens provide broad real estate ownership to many small investors through digital fractional ownership and low entry barriers, while investors do not yet hold well-diversified real estate token portfolios. We analyze the determinants of the success of security token offerings (STOs), secondary market trading, and daily aggregated capital flows. In addition to some property-specific determinants, we find that crypto-market-specific determinants, such as transaction costs and the related sentiment, are relevant both to the STO and capital flows.& COPY; 2023 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license ( http://creativecommons.org/licenses/by/4.0/ ), QC 20230803

Previous research has shown that real estate serves as a diversifier in mixed-asset portfolios. However, this empirical finding is beset with some drawbacks associated with direct real estate investment. In order to overcome some of these drawbacks, we use theoretical real estate exchange traded notes (ETNs) in a mean-shortfall setting to optimize an international mixed-asset portfolio. In addition, the typical long-only strategy is abandoned in favor of a 130/30 long-short and an exchange rate hedge strategy. Not only in-sample but also out-of-sample portfolios yield significant diversification benefits by means of real estate ETNs in different portfolio strategies., QC 20210203

We analyze whether lower rents for energy-inefficient apartments reflect tenants’ willingness to pay due to a higher green awareness, purchasing power, or energy consumption costs. Based on a German rental apartment dataset from Q1 2007 to Q1 2019, we use interaction terms for socioeconomic characteristics in a hedonic regression model. We find that rents are lower for apartments with higher energy consumption, even in neighborhoods with lower levels of green awareness. This relationship is stronger in neighborhoods with higher purchasing power, such that communities with low levels of green awareness and high purchasing power show the steepest negative slope for increasing energy consumption (−8.6% from the highest to lowest rating). Thus, the rent-decreasing effect of purchasing power is higher than that of green awareness. Splitting the entire period into smaller windows, we find that the interaction effect of green awareness has emerged in the most recent years (2017–2019). This may be driven by changes in regulation, which have made it easier for tenants to assess the energy consumption before they rent, or by a general increase in green awareness over this period., QC 20200707

In this study, we analyse how, and to what extent, direct and indirect effects (spatial spillovers) matter when estimating price effects for a property location in a flood zone. Unlike the previous literature, we show the importance of indirect effects resulting from a neighbourhood being situated in a flood zone. Additionally, the type of indirect effects (global vs. local) needs to be determined theoretically or empirically using an appropriate spatial model comparison approach. Using the Bayesian model comparison for data related to the flood-prone city of Dresden, Germany, we find strong evidence for a spatial Durbin error model which controls for local spillover effects. These indirect price effects amount to -6.5% for houses and -4.8% for condominiums. However, direct effects diminish when controlling for spatial spillovers. Our results are mostly robust across different model specifications, urban areas, and risk-adjusted prices that include future insurance costs, thus providing evidence of the importance of addressing indirect effects in the form of local spillovers in the analysis of flood zone effects. Ignoring indirect flood effects when formulating policy can lead to flood management that is inefficient and not cost-effective, as the economic consequences of flood are underestimated., QC 20230411

For varying borrowing and lending amounts, the corresponding subjective discount rates will also vary. A situation where high amounts correspond to lower discount rates is called a conventional magnitude effect, while the opposite is called a reverse magnitude effect. We present an overview of the theoretical arguments for both kinds of magnitude effects. Against this background, we then offer the first comprehensive empirical analysis of this issue based on real-life transaction data. To do so, we rely on more than 9,000 credit applications from the formerly largest German peer-to-peer (P2P) lending platform, Smava, between February 2007 and April 2013. We confirm that there is a conventional magnitude effect for lending money to others but a reverse magnitude effect for borrowing decisions. We suggest, as an explanation for our findings, the prevalence of cost-based determinants of magnitude effects in this special setting., QC 20200109

QC 20191029

Hochwassergefahren haben, sofern sie wahrgenommen werden, einen negativen Einfluss auf Immobilienpreise und tragen damit signifikant zur Wohlfahrtsminderung bei. Interdisziplinäre Ansätze aus dem Bauingenieurwesen und der Immobilienökonomie ermöglichen die quantitative Erfassung und Berücksichtigung dieser sekundären Schäden innerhalb des Hochwasserrisikomanagements. Die Auswirkungen von Hochwassergefahren auf Immobilienpreise werden am Untersuchungsgebiet Sachsen und den Hochwasserereignissen 2002 und 2013 aufgezeigt., QC 20191011

QC 20191029

By using the decomposing market-to-book model and the residual income model to estimate misvaluation, we find empirical evidence supporting the proposition that misvaluation has an impact on the financing decisions and liquidity management of REITs. Regarding the financing decisions, REITs experiencing a high increase in their stock prices will tend to increase their equity to exploit the low cost of capital relative to other financing forms. In addition, REITs are also more likely to increase debt issuances when their misvaluation is higher because overvalued REITs generally have easier access to debt. Finally, REITs use more cash than bank credit lines in liquidity management when they experience a misvaluation.