Originality/value of chapter – The findings of this chapter are novel in the field of alternative finance and, in particular, durable (housing) finance. Indeed, they build on a representative agent's theoretical model to infer about the degree of substitution or complementarity between financial and housing assets, which, in turn, can be useful at developing investment strategies for hedging against the risk of unfavorable housing fluctuations. Additionally, they open a new research avenue for understanding the determinants of housing risk premium by linking the dynamics of asset wealth and labor income with the behavior of future housing returns.
Rocha Armada, M. and Sousa, R. (2012), "Can the Wealth-to-Income Ratio be a Useful Predictor in Alternative Finance? Evidence from the Housing Risk Premium", Barnett, W. and Jawadi, F. (Ed.) Recent Developments in Alternative Finance: Empirical Assessments and Economic Implications (International Symposia in Economic Theory and Econometrics, Vol. 22), Emerald Group Publishing Limited, Bingley, pp. 67-79. https://doi.org/10.1108/S1571-0386(2012)0000022009Download as .RIS
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