Cross-Section of a ‘Bubble’: Stock Prices and Dividends during the British Railway Mania

Gareth Campbell

MPRA Paper from University Library of Munich, Germany

Abstract: Historical ‘bubbles’ are often attributed to mispricing, but the empirical analysis of such episodes has been limited. This paper examines a notable but academically neglected period, known as the British Railway Mania, using a new dataset and a cross-sectional methodology which is unique to the study of historical asset price reversals. The main finding is that the cross-sectional variation in stock prices, in every week of the sample, is explained by the cross-sectional variation in dividends, growth and risk, with no significant differences between the railways and non-railways. This implies that an economic bubble was not responsible for the rise and fall in the prices of railway assets at this time.

Keywords: bubbles; financial crises; Railway Mania (search for similar items in EconPapers)
JEL-codes: G01 G11 G12 N23 (search for similar items in EconPapers)
Date: 2010-03-31
New Economics Papers: this item is included in nep-his
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Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/21821/1/MPRA_paper_21821.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/22228/2/MPRA_paper_22228.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/23580/1/MPRA_paper_23580.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/61115/1/MPRA_paper_61115.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/29840/1/MPRA_paper_29840.pdf revised version (application/pdf)

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