Journal of Financial and Quantitative Analysis Vol. 57 No. 4 2022
Do Large Gains Make Willing Sellers?
open access
Abstract
Using unique real estate data that allow for accurately measured capital gains, we examine whether sell propensities depend on the magnitude of a seller’s capital gain. We find that short-term sell propensities are flat over losses and increasing in gains. Consistent with their higher sell propensities, selling prices are lower for properties with larger gains. Large-sized short-term stock investments also have sell propensities that are flat over losses and increasing in gains, although the sell propensities of typical-sized short-term stock investments are V-shaped. Our findings provide empirical support for theories of realization utility.
- DOI
- 10.1017/s0022109021000193
- Volume
- 57
- Issue
- 4
- Pages
- 1486-1528
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref