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Home advantage: The preference for local residential real estate investment

Citation

Wright, D and Yanotti, MB, Home advantage: The preference for local residential real estate investment, Pacific Basin Finance Journal, 57 pp. 1-21. ISSN 0927-538X (2019) [Refereed Article]

Copyright Statement

© 2019 Elsevier B.V. All rights reserved.

DOI: doi:10.1016/j.pacfin.2019.06.014

Abstract

Do residential real estate investors hold locally-concentrated or geographically-diversified portfolios? We identify a large sample of investors in the residential property market and measure the proximity of their investment properties to their owner-occupied address to study this question. We hypothesize that there is a preference among residential real estate investors to buy locally and find strong empirical support for this. This preference is in line with the results of ‘home bias’ research in other investment markets, yet contrasts with the documented benefits of geographic diversification in real estate markets. Our results indicate that the home bias may be partly mitigated by investor sophistication and is not driven by the relative purchasing power across geographic areas.

Item Details

Item Type:Refereed Article
Keywords:housing investors, home bias, anchoring, information asymmetry
Research Division:Economics
Research Group:Applied Economics
Research Field:Financial Economics
Objective Division:Economic Framework
Objective Group:Microeconomics
Objective Field:Preference, Behaviour and Welfare
UTAS Author:Yanotti, MB (Dr Maria Yanotti)
ID Code:137237
Year Published:2019
Web of Science® Times Cited:1
Deposited By:TSBE
Deposited On:2020-02-06
Last Modified:2020-04-30
Downloads:0

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