Efficiency, Scale Economies, and the Risk/Return Performance of Real Estate Investment Trusts

Michael Devaney () and William Weber ()

The Journal of Real Estate Finance and Economics, 2005, vol. 31, issue 3, pages 301-317

Abstract: Estimates from a directional output distance function are used to construct a risk/return frontier that defines the best-practice management technology for Real Estate Investment Trusts (REITs). We model REIT performance as a production process in which each REIT produces a desirable output (return) and an undesirable output (risk) using inputs of managerial effort and financial capital. The results suggest that ignoring the effects of risk yields a management technology that is significantly different from one that incorporates risk. In addition, market valuation is inversely related to inefficiency and directly related to leverage. Copyright Springer Science + Business Media, Inc. 2005

Keywords: best-practice technology; REIT risk/return; directional distance function (search for similar items in EconPapers)
Date: 2005
View list of references

Downloads: (external link)
http://hdl.handle.net/10.1007/s11146-005-2791-5 (text/html)
Access to full text is restricted to subscribers.

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: http://EconPapers.repec.org/RePEc:kap:jrefec:v:31:y:2005:i:3:p:301-317

Access Statistics for this article

The Journal of Real Estate Finance and Economics is edited by Steven R. Grenadier, James B. Kau and C.F. Sirmans

More articles in The Journal of Real Estate Finance and Economics from Springer
Series data maintained by Christopher F. Baum ().