Attitudes Toward and Perceptions of the Ambiguity of House and Stock Prices

Yu Zhang and Donald Haurin

ERES from European Real Estate Society (ERES)

Abstract: This study estimates individuals' attitudes toward and perceptions of ambiguity of house prices and stock prices, using experiment data from the Rand American Life Panel (ALP) survey. We estimate two important parameters in multiple prior models and -MaxMin ambiguity preferences: the degree of ambiguity aversion and the degree of confidence in the reference prior distribution of future prices, this being a measurement of the perceived level of ambiguity. Regarding attitudes, we find that individuals are slightly ambiguity seeking with regard to house prices while they are slightly ambiguity averse with regard to stock prices. Their degree of confidence in the reference distribution for stocks is lower than for house prices. We also find that increased state-level house price volatility during the past year and growth of house price in the past three years increase perceived ambiguity. Moreover, ambiguity matters in that ambiguity-averse renters are less likely to buy a house. Correspondingly, ambiguity-averse stock investors tend to have less stock holdings.

Keywords: Ambiguity; Homeownership; House Prices; risk aversion (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2019-01-01
New Economics Papers: this item is included in nep-upt and nep-ure
References: Add references at CitEc
Citations:

Downloads: (external link)
https://eres.architexturez.net/doc/oai-eres-id-eres2019-75 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2019_75

Access Statistics for this paper

More papers in ERES from European Real Estate Society (ERES) Contact information at EDIRC.
Bibliographic data for series maintained by Architexturez Imprints ().