Amazon Is Coming to Town: Sequential Information Revelation in the Housing Market

53 Pages Posted: 4 Feb 2021 Last revised: 5 Apr 2022

See all articles by Yifan Chen

Yifan Chen

Pennsylvania State University

Sean Wilkoff

University of Nevada, Reno

Jiro Yoshida

Pennsylvania State University - Smeal College of Business; The University of Tokyo - Graduate School of Economics

Date Written: April 4, 2022

Abstract

This study uses Amazon's progressive revelation of its new headquarters locations in Virginia and New York to demonstrate that the housing market fully incorporates information about future demand well before disclosure. Spatial difference-in-differences analysis shows that housing prices near the Virginia headquarters exhibit 4.9% premia before Amazon's headquarters decision but no additional increase upon decision. Price premia for New York reach 17.5% before the decision but disappear once Amazon cancels the headquarters. Other finalist cities exhibit no price premia, precluding the possibility of speculation. Overall, this study suggests that the housing market can quickly incorporate private information about future demand shocks.

Keywords: Information revelation; Private information; Difference-in-differences; Office locations; Housing prices

JEL Classification: G14, R21

Suggested Citation

Chen, Yifan and Wilkoff, Sean and Yoshida, Jiro, Amazon Is Coming to Town: Sequential Information Revelation in the Housing Market (April 4, 2022). Available at SSRN: https://ssrn.com/abstract=3762672 or http://dx.doi.org/10.2139/ssrn.3762672

Yifan Chen

Pennsylvania State University ( email )

University Park
PA 16802
United States

Sean Wilkoff

University of Nevada, Reno ( email )

1664 N. Virginia St
Reno, NV 89557
United States

Jiro Yoshida (Contact Author)

Pennsylvania State University - Smeal College of Business ( email )

368 Business Building
Smeal College of Business
University Park, PA 16802
United States
814-865-0392 (Phone)
814-865-6284 (Fax)

HOME PAGE: http://www.personal.psu.edu/juy18

The University of Tokyo - Graduate School of Economics ( email )

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Bunkyo-ku, Tokyo 113-0033
Japan
813-5841-5653 (Phone)
813-5841-5521 (Fax)

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