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Do Large Gains Make Willing Sellers?, Dong Hong, Roger Loh, Mitch Warachka
Do Large Gains Make Willing Sellers?, Dong Hong, Roger Loh, Mitch Warachka
Research Collection Lee Kong Chian School Of Business
Using unique real estate data that allow for accurately-measured capital gains, we examine whether sell propensities depend on the magnitude of a seller's capital gain. We find that short-term sell propensities are flat over losses and increasing in gains. Consistent with their higher sell propensities, selling prices are lower for properties with larger gains. Large-sized short-term stock investments also have sell propensities that are flat over losses and increasing in gains, although the sell propensities of typical-sized short-term stock investments are V-shaped (Ben-David and Hirshleifer (2012)). Our findings provide empirical support for the realization utility theories of Barberis and Xiong …