Paul R. Goebel

The Integration of Mortgage Markets and Capital Markets

In this paper, we develop a model to predict the impact of deregulation in the form of relaxing interest rate control on the integration between the mortgage credit market and the general credit market. The model is tested through the examination of the long-term Granger-like equilibrium relationship between mortgage interest rates and general interest rates in the pre-1980 regulated vs. the post-1980 deregulated periods. It is shown that the level of regulation, in the form of targeting general interest rate levels, contributes to the segmentation of the mortgage market from the capital market. To test this model, we compare the relationship between mortgage interest rates and general interest rates around 1980 where major control on interest rate levels in capital markets was lifted. Using Engle and Grangers procedure to overcome the estimation problem from nonstationarity in the interest rate series, we are able to find that the two interest rates were cointegrated after 1980 but not before. More importantly, it appears that the two markets were already integrated before the full development of the secondary mortgage markets between 1984 and 1987. Therefore, we conclude that the bulk of the integration between the mortgage and capital markets was completed as a result of the removal of interest rate controls around 1980, in contrast with previous studies that find integration occurred during the mid-1980s primarily as a result of the rapid development of the secondary mortgage markets. Copyright American Real Estate and Urban Economics Association.

The use of locational factors by tenants in shopping centre space selection

Summary Locational factors, such as site‐specific physical characteristics and geographically linked locational attributes, comprise some of the most important components of shopping centres that make them more or less valuable to the space customer. However, previous empirical research has focused primarily on the financial element of shopping centre selection, while virtually ignoring the physical and locational attributes. This study identifies and defines specific locational factors that are felt to be important to shopping centre success. After establishing a framework for evaluating these factors, the framework is tested in a local market to examine a shopping centres potential viability. Finally, the locational elements that are identified and evaluated are compared with the financial elements of the test centres to show that there is a positive and significant relationship between the locational elements and the rent and occupancy levels. The primary implication of this research is that potential...

Measuring the influence of location on shopping centre space selection: A reply to Adams and Matysiak

Summary As a reply to concerns raised by Adams and Matysiak (1996), this provides additional information and clarification to our original article The Use of Locational Factors by Tenants in Shopping Centre Space Selection (Forgey and Goebel, 1995).