Annual Conference

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Real Estate and Urban Economics, Senior Fellows/Fellows

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May 2019

Tax Evasion, Capital Gains Taxes, and the Housing Market

Jing WU, Sumit AGARWAL, Keyang LI, Qin YU, Jubo YAN
In this paper, we exploit a policy shock that differentially increased capital gains taxes for some residential property sellers and document tax evasion in the residential resale market in China. Having precise information of the transaction price and the reported price to the tax authority, we sho...
Keywords: Tax evasion, capital gains tax, housing market, housing policy
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Annual Conference

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Real Estate and Urban Economics

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May 2019

FinTech Borrowers: Lax-Screening or Cream-Skimming?

Vincent YAO, Marco Di MAGGIO
Personal credit is the fastest-growing segments of the consumer credit market, mainly driven by fintech lenders' staggering expansion. We show that fintech lenders acquire market share by first lending to higher-risk borrowers and then to safer borrowers, and mainly rely on hard information to make ...
Keywords: FinTech, Credit History, Self-Control, Present-Bias
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Annual Conference

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Real Estate and Urban Economics, Senior Fellows/Fellows

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May 2019

Private Equity Incentive Contracting and Fund Leverage Choice When Investors Only Care About Meeting Return Targets

Yongheng DENG, Teng LI, Timothy RIDDIOUGH
We show how the standard PE compensation contract is used to create incentives for GPs to utilize leverage so that LP investors can meet their return targets. A theory of fund capital structure is developed in which investors trade off alpha with costs of financial distress. We then show how carried...
Keywords: private equity, Investment, pension fund, carried interest
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Annual Conference

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Real Estate and Urban Economics

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May 2019

Multiple Tranches Information Asymmetry and the Impediments to Mortgage Renegotiation

Sanket KORGAONKAR
This paper examines how the creation of asset-backed security tranches disperses ownership of an asset–the pool of mortgages–subsequently impeding renegotiation of the underlying delinquent loans. I describe how multiplicity of tranches worsens the agency problem between a residential mortgage s...
Keywords: Securitization, Mortgage Servicing, Loan Modifications, financial crisis
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Annual Conference

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Real Estate and Urban Economics, Senior Fellows/Fellows

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May 2019

Information Asymmetries and Learning in Commercial Real Estate Markets

Sumit AGARWAL, Tien Foo SING, Wang LONG
This paper empirically tests information asymmetries and learning in global commercial real estate markets. We find that foreign investors pay a premium of 3.6%, on average, relative to local investors for comparable properties in local markets. The premiums reflect information disadvantages of fore...
Keywords: Learning, Information asymmetry, Foreign Investors, Commercial Real Estate Markets, Cross-border investments
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