Partial Interests in Recreational Property

Posted: 23 Oct 2007

See all articles by Peter F. Colwell

Peter F. Colwell

University of Illinois

Carolyn A. Dehring

University of Georgia - Department of Insurance, Legal Studies, Real Estate

Geoffrey K. Turnbull

Georgia State University - Department of Economics

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Abstract

Changing demographics, growing real incomes, and friendly tax laws underlie the continuing growth in demand for recreational real estate in the US. The market for recreational property has undergone a major transformation over the past decades, with the refinement and deepening of markets for partial property ownership vehicles. This paper represents the first to analyze the factors underlying the demand for partial ownership interests. It develops a theory of partial ownership demand that focuses on the roles of familiarity and location-specific human capital in mediating the consumption uncertainty associated with particular recreation locations. Using private data from a survey of partial ownership participants, the empirical analysis yields results consistent with the theory: factors associated with greater site-specific recreation price, like distance between the primary residence and the recreation site and frequency of visits per week, reduce the share of ownership demanded, while factors associated with lower consumption risk tend to increase the share of ownership demanded.

Keywords: partial interest, fractional, vacation home, recreation demand

Suggested Citation

Colwell, Peter F. and Dehring, Carolyn A. and Turnbull, Geoffrey K., Partial Interests in Recreational Property. Journal of Real Estate Finance and Economics, Vol. 37, No. 1, 2008, Available at SSRN: https://ssrn.com/abstract=1023998

Peter F. Colwell

University of Illinois ( email )

304B David Kinley Hall
1206 South Sixth Street
Champaign, IL 61820
United States
217-333-1185 (Phone)
217-244-3102 (Fax)

Carolyn A. Dehring (Contact Author)

University of Georgia - Department of Insurance, Legal Studies, Real Estate ( email )

Athens, GA 30602-6255
United States
706-542-3809 (Phone)

Geoffrey K. Turnbull

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-651-0419 (Phone)
404-651-2737 (Fax)

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