This paper uses a choice experiment to evaluate the consumers' willingness to pay for energy-saving measures in Switzerland's residential buildings. These measures include air renewal (ventilation) systems and insulation of windows and facades. Two groups of respondents consisting respectively of 163 apartment tenants and 142 house owners were asked to choose between their housing status quo and each one of the several hypothetical situations with different attributes and prices. The estimation method is based on a fixed-effects logit model. The results suggest that the benefits of the energy-saving attributes are significantly valued by the consumers. These benefits include both individual energy savings and environmental benefits as well as comfort benefits namely, thermal comfort, air quality and noise protection.

Risk-Aversion and Willingness to Pay For Energy Saving Measures in Residential Buildings

The presence of investor sentiment pushes asset prices away from the equilibrium level justified by underlying fundamentals. While sentiment is not directly observable, identifying appropriate proxies and, quantifying the impact of sentiment on asset prices is an important topic. Asset prices that do not appropriately reflect fundamental values may result in inefficient allocation of capital – impacting portfolio allocation decisions and the cost of capital. Utilising a number of sentiment proxies, over the period 1990-2015, we demonstrate a strong relationship between investor sentiment and stock returns that is consistent with theoretical explanations of sentiment. We determine that VIX is the preferred measure of sentiment in terms of improving model fit and adding explanatory power. Causality tests suggest that investor fear (VIX) drives returns across firm-size and value, and also across industry. We also illustrate that firms that are more subjective to value, or face limits to arbitrage, such as small-cap stocks, or those in the business equipment (technology) or telecoms industry, are most responsive to changes investor sentiment. Finally, we demonstrate that sentiment has a greater influence on market returns during recession, when sentiment is at its lowest ebb, and this is particularly true for those stocks most susceptible to speculative demand.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2749518_code1444858.pdf?abstractid=2749518&mirid=4

The Importance of Fear: Investor Sentiment and Stock Market Returns

There is an active and growing literature examining the rental rate, sales price, and occupancy premiums associated with sustainable or energy efficient certified real estate. To date, the focus has rested largely on office properties and for sale single family residential properties. We examine the rental rates achieved by green multifamily properties, providing the first look at the population of LEED market-rate apartments in the United States. We find an approximate 8.9 percent rental rate premium associated with LEED apartments. Moreover, this research provides the first indication that LEED certification garners an additional premium over non-certified space that identifies as green, indicating the strength of the certification signal and contributing to the longstanding discussion on the merits of certification.

Certification Matters: Is Green Talk Cheap Talk?

Summary
This paper incorporates text data from MLS listings into a hedonic pricing model. We show that the comments section of the MLS, which is populated by real estate agents who arguably have the most local market knowledge and know what homebuyers value, provides information that improves the performance of both in-sample and out-of-sample pricing estimates. Text is found to decrease pricing error by more than 25%. Information from text is incorporated into a linear model using a tokenization approach. By doing so, the implicit prices for various words and phrases are estimated. The estimation focuses on simultaneous variable selection and estimation for linear models in the presence of a large number of variables using a penalized regression. The LASSO procedure and variants are shown to outperform least-squares in out-of-sample testing. Copyright © 2016 John Wiley & Sons, Ltd.

Textual Analysis in Real Estate

News-based equity market uncertainty and crude oil volatility

Real estate brokers develop their own sense of style and methods for entering listings into the MLS. Anecdotally, they may have their own take on what works and what does not, but there is very lit...

The Impact of Broker Vernacular in Residential Real Estate

For seasoned equity offerings, the discounting of the offer price from the closing price on the previous day is influenced by the level of asymmetric information surrounding the firm and the offering, as well as compensation to investors willing to purchase new shares. Discounting is important for the offering firm because it represents money left on the table, and this is the first paper to examine the degree of discounting and its determinants for real estate investment trusts (REITs). Studying the discounting of REIT seasoned equity offers from 1994 to 2006, this paper provides support for both the placement cost and value uncertainty hypotheses of discounting. When new REIT shares are more difficult to place with investors and there is less consensus about the valuation of REIT shares, investors will require greater discounting of the offer price.

Discounting and Underpricing of REIT Seasoned Equity Offers

For seasoned equity offerings, the discounting of the offer price from the closing price on the previous day is influenced by the level of asymmetric information surrounding the firm and the offeri...

https://www.tandfonline.com/doi/pdf/10.1080/15140326.2020.1729571

Impact of News-Based Equity Market Volatility On International Stock Markets

Spiking oil prices over the last five years and a heightened awareness of the global warming phenomenon have placed environmentalism and sustainability into the mainstream. Consumers have these con...

Kimberly R. Goodwin

Papers

The Impact of Broker Vernacular in Residential Real Estate

Discounting and Underpricing of REIT Seasoned Equity Offers

Discounting and Underpricing of REIT Seasoned Equity Offers

Impact of News-Based Equity Market Volatility On International Stock Markets

The Demand for Green Housing Amenities