Austin J. Jaffe

On the role of transaction costs and property rights in housing markets

Abstract In recent years, the importance of transaction costs and the critical role of property rights in economic analysis have become increasingly emphasised as researchers seek better to understand economic behaviour. These and other institutions offer the housing analyst greater opportunity to evaluate housing choices and housing policies compared to neo‐classical economics models of housing. This paper builds upon this growing tradition and examines the leading property rights issues affecting housing in market economies. Specifically, several contractual instruments which are used in housing markets are identified and examined: listing agreements, sales contracts, mortgages, leases and management agreements. Taken together, this paper represents a research agenda for the economics of contractual arrangements in housing markets.

The Theory and Evidence on Real Estate Financial Decisions: A Review of the Issues

There has developed a growing body of literature, both theoretically and empirically based, on real estate financial decisions. Despite these advances, there are a number of important issues that remain unanswered. The purpose of this paper is to provide a review and analysis of where research on real estate financial decisions has been, where it stands today, and where it is likely to be headed in the future. Some of the unresolved issues in real estate investment analysis are also discussed. The hope is that this review will provide the stimulus for solving some of these complex issues. Copyright American Real Estate and Urban Economics Association.

Restitution in transition countries

Changing the property rights arrangements to land and buildings is a fundamental step in the transformation process underway in Eastern and Central Europe and elsewhere. The concept of property hinges on the choice of property conventions adopted by each society. Defining what property means is a complex and controversial task, especially when the scope of change in transition countries is so dramatic. Restitution is often a first step in acknowledging a latent property rights paradigm in these nations. Since property rights form the foundation of how and why economies function, it is important to identify the theoretical and empirical evidence relating property rules to economic outcomes. In this paper, we investigate why restitution is implemented in some countries but not in others. Further, if restitution is adopted, how is it implemented? We speculate that the choice of restitution as a property institution may be a proxy for the development of future institutions.

Toward an Evolutionary Theory of Trade Associations: The Case of Real Estate Appraisers

This paper proposes a developmental theory of trade association life cycles with special emphasis on the case of real estate appraisers. Given a neo‐institutional perspective of the demand for appraisal services, the paper views real estate appraisers as information specialists. Trade associations tend to develop along a common, although not strictly fixed, set of steps. At each stage, various institutional activities occur that when observed, can be used to characterize the associations rate of development. In this context, real estate appraisers and their institutions are examined. Recent advances provide evidence that major changes are currently underway.

Contract Theory and Mortgage Foreclosure Moratoria

Contracts are an essential institution in capitalist economies. Contract law provides a long and interesting constitutional history. At the same time, mortgage foreclosure moratoria is shown to be an occasional and repeated phenomenon. This paper explores the legal and economic aspects of this issue via a survey of the schools of thought on contracts. The paper also speculates about the nature of mortgage contracts and the economics of moratoria statutes.

Is There A “New” Internal Rate of Return Literature?

Recent writing in various real estate journals appears to have become interested in an issue which a number of other journals have treated previously. Specifically, the concept known as the internal rate of return (IRR) has been examined extensively by the literatures of business finance, management science, and economic theory. This paper surveys and reviews the literature by problem, journal and date. The paper concludes that this demonstration suggests the necessity of an understanding of literature in related disciplines as well as our own. Copyright American Real Estate and Urban Economics Association.

The Property Rights Game: Discovering the Meaning of Private Property

In this paper we discuss the results of an educational game we have developed. This game deals with the acquisition, use, and transfer of private property rights in land and shows participants the importance of property rights in market economies. While our findings are not scientific, they do show that production in a society with solely communal property collapses while production in a society with private property flourishes. We hope that these results encourage others to use this exercise as an educational experience for students.