Asymmetric response of demand-supply mismatch to investor's sentiment

We look through both the demand and supply side information to understand dynamics of price determination in the real estate market and examine how accurately investors’ attitudes predict the market returns and thereby flagging off extent of any demand-supply mismatch. Our hypothesis is based on the possibility that investors’ call for action in terms of their buy/sell decision and adjustment in reservation/offer prices may indicate impending demand-supply imbalances in the market. In the process, we study several real estate sectors to inform our analysis. The timeframe of our analysis (1995-2010) allows us to observe market dynamics over several economic cycles and in various stages of those cycles. Additionally, we also seek to understand how investors’ attitude or the sentiment affects the market activity over the cycles through asymmetric responses. We test our hypothesis variously using a number of measures of market activity and attitude indicators within several model specifications. The empirical models are estimated using Vector Error Correction framework. Our analysis suggests that investors’ attitude exert strong and statistically significant feedback effects in price determination. Moreover, these effects do reveal heterogeneous responses across the real estate sectors. Interestingly, our results indicate the asymmetric responses during boom, normal and recessionary periods. These results are consistent with the theoretical underpinnings.

Ground-based aerosol optical depth trends at three high-altitude sites in Switzerland and Southern Germany from 1995–2010

Ground-based aerosol optical depth (AOD) climatologies at three high-altitude sites in Switzerland (Jungfraujoch and Davos) and Southern Germany (Hohenpeissenberg) are updated and re-calibrated for the period 1995 – 2010. In addition, AOD time-series are augmented with previously unreported data, and are homogenized for the first time. Trend analysis revealed weak AOD trends (λ = 500 nm) at Jungfraujoch (JFJ; +0.007 decade-1), Davos (DAV; +0.002 decade-1) and Hohenpeissenberg (HPB; -0.011 decade-1) where the JFJ and HPB trends were statistically significant at the 95% and 90% confidence levels. However, a linear trend for the JFJ 1995 – 2005 period was found to be more appropriate than for 1995 – 2010 due to the influence of stratospheric AOD which gave a trend -0.003 decade-1 (significant at 95% level). When correcting for a recently available stratospheric AOD time-series, accounting for Pinatubo (1991) and more recent volcanic eruptions, the 1995 – 2010 AOD trends decreased slightly at DAV and HPB but remained weak at +0.000 decade-1 and -0.013 decade-1 (significant at 95% level). The JFJ 1995 – 2005 AOD time-series similarly decreased to -0.003 decade-1 (significant at 95% level). We conclude that despite a more detailed re40 analysis of these three time-series, which have been extended by five years to the end of 2010, a significant decrease in AOD at these three high-altitude sites has still not been observed.