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http://ssrn.com/abstract=199432
 
 

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Confronting Information Asymmetries: Evidence from Real Estate Markets


Mark J. Garmaise


University of California, Los Angeles (UCLA) - Anderson School of Management

Tobias J. Moskowitz


University of Chicago - Booth School of Business

November 1999

Center for Research in Security Prices (CRSP) Working Paper No. 507

Abstract:     
This paper studies the role of asymmetric information in commercial real estate markets in the U.S. and Canada. We propose a novel and exogenous measure of information based on the quality of property tax assessments in different regions and time periods. Employing direct and indirect information variables, we find strong evidence that information considerations are significant in real estate. We show that market participants resolve information asymmetries by purchasing nearby properties and by avoiding trades with informed professional brokers. There is some indication that purchasers also make use of informed intermediaries. The evidence that the choice of financing is used to address information concerns is mixed and fairly weak.

Number of Pages in PDF File: 45

JEL Classification: R00

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Date posted: February 3, 2000  

Suggested Citation

Garmaise, Mark J. and Moskowitz, Tobias J., Confronting Information Asymmetries: Evidence from Real Estate Markets (November 1999). Center for Research in Security Prices (CRSP) Working Paper No. 507. Available at SSRN: http://ssrn.com/abstract=199432 or http://dx.doi.org/10.2139/ssrn.199432

Contact Information

Mark J. Garmaise (Contact Author)
University of California, Los Angeles (UCLA) - Anderson School of Management ( email )
110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
Tobias J. Moskowitz
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-834-2757 (Phone)
773-702-0458 (Fax)
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