Cash to Spend: IPO Wealth and House Prices

64 Pages Posted: 16 Feb 2019 Last revised: 17 Nov 2020

See all articles by Barney Hartman-Glaser

Barney Hartman-Glaser

University of California, Los Angeles (UCLA) - Anderson School of Management

Mark Thibodeau

Florida International University (FIU) - Hollo School of Real Estate

Jiro Yoshida

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

Date Written: November 30, 2018

Abstract

This study empirically demonstrates the impact of wealth shocks from initial public offerings (IPOs) on local house prices by distinguishing from changes in the uncertainty and availability of wealth. Applying spatial event study methods to IPOs in California from 1993 to 2017, we find increases in house prices around filing and issuing dates. Upon lockup expiration, house price changes depend on post-issuance returns. Treating the San Francisco Bay as a natural commuting barrier, we use a difference-in-differences approach to identify sustained price increases in markets with recent IPO filings and temporary increases for recent issuing and lockup expiration.

Keywords: Initial Public Offerings, Housing Value, Hedonic Regression, Wealth Effects, Liquidity Constraints, Executive Compensation

JEL Classification: L26, M12, J33, R21

Suggested Citation

Hartman-Glaser, Barney and Thibodeau, Mark and Yoshida, Jiro, Cash to Spend: IPO Wealth and House Prices (November 30, 2018). Available at SSRN: https://ssrn.com/abstract=3329651 or http://dx.doi.org/10.2139/ssrn.3329651

Barney Hartman-Glaser

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

Mark Thibodeau

Florida International University (FIU) - Hollo School of Real Estate ( email )

Miami, FL 33199
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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