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

Real Estate Economics, forthcoming

65 Pages Posted: 4 Feb 2021 Last revised: 14 Aug 2023

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: August 4, 2023

Abstract

This study demonstrates that the housing market can incorporate information quickly instead of slowly over time, using Amazon's gradual revelation of its new headquarters locations in Virginia and New York. Spatial difference-in-differences analysis shows that housing prices near the Virginia headquarters exhibit 4.9% premia months before the decision, while price premia for New York reach 17.5% before the decision but disappear upon cancellation. The absence of significant effects on transaction volume, construction, or price premia for other finalist cities rules out the possibility of speculation. Overall, this study provides a counterpoint to the commonly held belief that the real estate market is always slow to respond to information about future demand shocks.

Keywords: Information revelation; 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 (August 4, 2023). Real Estate Economics, forthcoming, 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 )

7-3-1 Hongo
Bunkyo-ku, Tokyo 113-0033
Japan
813-5841-5653 (Phone)
813-5841-5521 (Fax)

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