Xun Bian

University of North Texas | UNT · Department of Finance, Insurance, Real Estate and Law (FIREL)

The objective of this paper is to offer a theoretical model of asymmetric information to analyze the screening role of prepayment penalty. We consider both default risk and prepayment risk. What makes the role of prepayment penalty interesting and more complicated is that a borrower’s contract choice could send conflicting signals to the lender abo...

This paper investigates the interaction between stock price movement and REIT earnings management. We examine whether information generated from stock trading influences managers' incentives to engage in earnings management. We first test if stock investors are able to detect earnings management by examining whether REITs that are suspected of enga...

This study examines how immigrants, often concentrated in urban areas and burdened by higher rents, benefit from rent control. We focus on New York City's rent stabilization policy, using high-quality microdata from 2002 to 2017. We find that immigrant tenants face greater rent affordability challenges and are more likely to live in rent-stabilized...

We study the effect of housing leverage, measured using the loan‐to‐value (LTV) ratio, on homeowners' retirement decisions. We find that in general, elevated LTV ratios delay retirements. By decomposing the changes of the current LTV ratio into (1) equity extractions, (2) equity build‐up, (3) home value increases, and (4) home value decreases, we f...

We study the effect of housing leverage, measured using the loan-to-value (LTV) ratio, on homeowners' retirement decisions. We find that in general, elevated LTV ratios delay retirements. By decomposing the changes of the current LTV ratio into 1) equity extractions, 2) equity build-up, 3) home value increases, and 4) home value decreases, we find...

We examine the multifaceted influence of homeownership on charitable giving through several channels: tax deductibility, household wealth, and mobility. We find that homeowners donate substantially more than renters, and tax deductibility, wealth, and mobility are important predictors of the owner-renter gap in donations. We also show that the owne...

We investigate the relation between commercial real estate (CRE) returns and regional innovativeness and find that regions with more innovation exhibit higher total returns on commercial property. And, when we investigate the extent to which income return and capital return on commercial properties are related to local innovativeness, we report a p...

We investigate the relation between commercial real estate (CRE) returns and regional innovativeness and find that regions with more innovation exhibit higher total returns on commercial property. And, when we investigate the extent to which income return and capital return on commercial properties are related to local innovativeness, we report a p...

We examine the impact of financial leverage, measured by the loan-to-value (LTV) ratios, on elderly homeowners' mobility and housing tenure choices. Using a 1999-2019 sample from the Panel Study of Income Dynamics (PSID), we find that a higher LTV ratio substantially increases an elderly homeowner's likelihood of exiting homeownership. In particula...

We examine the role of information disclosure in the housing market, offering both theory and evidence for observed variability in disclosure strategies among property listings in a multiple listing service (MLS). Our initial empirical findings and the theoretical literature suggest a positive link between information disclosure (e.g., number of ph...

This paper investigates the interaction between stock price movement and REIT earnings management. We examine whether information generated from stock price volatility influences managers' incentives to engage in earnings management. Consistent with the efficient markets hypothesis, we find that suspected earnings-management firms do not appear to...

In this study, we examine the effect of disability on mortgage delinquency. Using 2007–2017 data from the Panel Study of Income Dynamics (PSID), we study the impact of disability on ex-post delinquency rate and ex-ante self-assessed delinquency risk. We find that disability substantially increases a household’s likelihood of falling behind on mortg...

We study the external impact of foreclosures, exploring how foreclosed properties affect the liquidity of nearby homes. Empirically, we find a foreclosure increases a nearby home's time‐on‐market by approximately 30% on average, which is primarily driven by a disamenity effect. There is evidence that this delay comes from surprises or information s...

Real estate transactions are often established through financing. We study the effect of financing on property prices. We show that properties can transact at prices well above their collateral values. Therefore, the commonly used loan-to-value (LTV) ratio suffers a bias that can significantly understate credit risk. This bias is exacerbated when m...

Bargaining and mortgage financing have been extensively studied in the literature. However, they have only been studied separately. This paper is the first to embed financing into a bargaining model, and our model yields several new insights. First, we show that financing creates new ground for trading. In contrast to conventional wisdom, our model...

In this study, we examine the effect of housing equity position, measured using the loan-to-value (LTV) ratio, on the probability of home improvements. Using 2001-2011 data from the Panel Study of Income Dynamics (PSID), we find that a higher LTV ratio, in general, reduces the probability of home improvements. We also find that the probability of h...

We examine commission splits between listing and selling agents in real estate transactions. We construct a theoretical model to show that agency problems arise when a listing agent attempts to maximize his or her payoff while setting the commission split. Mitigation to these agency problems can be achieved through the imposition of a limited durat...

This study is the first to examine the principal-agent issues surrounding how agents’ efforts to sell their own properties affect their efforts to sell concurrently listed client properties. The principal-agent model shows that listed agent-owned properties induce agents to worker harder over all, but diminish effort dedicated to marketing concurre...

We examine the role transaction costs play, particularly the costs related to search and bargaining, in impeding or delaying real estate market transactions. In a theoretical model, we show that agents' incentives are influenced by transaction costs in a way that will increase a home's marketing duration and decrease the probability a home will sel...

We study the effect of financial leverage, measured using the loan-to-value (LTV) ratios, on elderly homeowners’ decisions to downsize. Using a 1999-2011 sample of elderly homeowners from the Panel Study of Income Dynamics (PSID), we find that a higher LTV ratio increases the propensity to downsize. Elderly homeowners with higher LTV ratios are mor...

Given the significant role of real estate agents in the housing market, this study examines how agents’ incentives regarding the size of their listing inventories indirectly affect residential home prices and liquidity. The theory shows that taking on additional inventory generates a critical principal agent issue, resulting in the dilution of an a...

We examine the role transaction costs play, particularly the costs related to search and bargaining, in either impeding or delaying market transactions in real estate. In a theoretical model, we show that agents’ incentives are influenced by transaction costs in a way that will increase the time a home spends on the market and decrease the probabil...

Given the potential risk of recidivism, recent real estate research has found that registered sex offenders impose external costs, which are capitalized into the value and liquidity of nearby residential real estate. Several studies have shown that registered sex offenders lower nearby residential home prices significantly, in addition to lengtheni...

To realize the benefit of the prepayment option embedded in a fixed-rate mortgage (FRM) contract, a borrower would have to make correct refinancing decisions. Hence, a FRM is never “maintenance-free”, such maintenance usually cost a substantial amount of time and effort. This paper asks the question: How do such costs influence borrower’s choice on...

This paper investigates the relationship between a country's Olympic performance and its overall economic condition, including population, economic resources, and political structures. A panel data set comprising the yearly data of 1996, 2000, and 2004 are estimated by using a fixed-effect Tobit regression model. Following previous studies on this...