Efficiency in the Real Estate Market: Case of Energy Efficiency

Ari Laitala and Kauko Viitanen

ERES from European Real Estate Society (ERES)

Abstract: Purpose - One suggestion of the Efficient Market Hypothesis (EMH) is that efficient market maximizes the value accumulation of market players. Based on the literature review, framework and prerequisites for the value maximization in efficient real estate market is constructed. This framework is preliminary tested by the case study exploiting focus group discussions. Purpose of the paper is to clarify how market efficiency and value maximization are interwoven.Design/methodology/approach - Hypothesis development is based on the literature review focusing on areas of market efficiency and value theory. In the empirical part study employs the focus group method.Findings - Based on the literal part it can be shown that informational efficient market makes the value maximization possible. On the other hand, value maximization is a driver for the efficient market behavior. Empirical results indicate that suggested framework for the value maximization seems to have a real life relevancy.Research limitations/implications: Due to a nature of the research methodology, empirical validation of the developed framework has an indicative value at this point.Originality/value - In this paper EMH and value theory are brought together. It is shown how they are linked on each other. Nature of the EMH is broadened by the concepts of subjective and objective value.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2013-01-01
New Economics Papers: this item is included in nep-ene
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