Tower Building and Stock Market Returns

39 Pages Posted: 22 Mar 2011 Last revised: 14 Apr 2013

Date Written: April 9, 2013


Construction starts of skyscrapers predict subsequent US stock returns. The predictive ability exceeds that of alternatives such as the prevailing historical mean, predictions based on dividend ratios and recently suggested combination forecasts. One explanation for these patterns is that tower building is indicative of over-optimism; alternatively, tower building could help to identify periods of low risk aversion. I present indirect evidence that is consistent with both explanations.

Keywords: Predictability, Stock Market, Dividend yield, Skyscrapers

JEL Classification: G12, G14

Suggested Citation

Löffler, Gunter, Tower Building and Stock Market Returns (April 9, 2013). Journal of Financial Research, Forthcoming. Available at SSRN: or

Gunter Löffler (Contact Author)

Ulm University ( email )

Ulm, D-89081
+49 731 50 23598 (Phone)
+49 731 50 23950 (Fax)

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