Research

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April 2025 Under review at Journal of Finance
The Arbitrage-free Valuation of Durable Assets and Related Real Options
The Arbitrage-free Valuation of Durable Assets and Related Real Options

Abstract # Not sure what this one does, but for good measure: Valuing durable assets is essential for informed decisions on acquisitions, dispositions, budgeting, and borrowing, yet remains challenging due to illiquidity, heterogeneity, and subjective assessments. We propose a valuation model based on the no-arbitrage option pricing theory that outperforms traditional hedonic methods both in- and out-of-sample, remains robust under changing market conditions, and can price real options on durable assets. Our model has broad utility - detecting arbitrage, informing refinancing de-cisions, valuing collateral, and assessing whether securitized asset prices reflect underlying values. This forward-looking, market-sensitive approach addresses key limitations of conventional methods and improves decision-making across investment, lending, and financial reporting contexts.

Cite DOI Working paper
May 2018 Journal of Neurogenetics, 32(2), pp. 53-64
‘Necessary and sufficient’ in biology is not necessarily necessary – confusions and erroneous conclusions resulting from misapplied logic in the field of biology, especially neuroscience (2018)
‘Necessary and sufficient’ in biology is not necessarily necessary – confusions and erroneous conclusions resulting from misapplied logic in the field of biology, especially neuroscience (2018)

Abstract In this article, we describe an incorrect use of logic which involves the careless application of the ‘necessary and sufficient’ condition originally used in formal logic. This logical fallacy is causing frequent confusion in current biology, especially in neuroscience. In order to clarify this problem, we first dissect the structure of this incorrect logic (which we refer to as ‘misapplied-N&S’) to show how necessity and sufficiency in misapplied-N&S are not matching each other. Potential pitfalls of utilizing misapplied-N&S are exemplified by cases such as the discrediting of command neurons and other potentially key neurons, the distorting of truth in optogenetic studies, and the wrongful justification of studies with little meaning. In particular, the use of the word ‘sufficient’ in optogenetics tends to generate misunderstandings by opening up multiple interpretations. To avoid the confusion caused by the misleading logic, we now recommend using ‘indispensable and inducing’ instead of using ‘necessary and sufficient.’ However, we ultimately recommend fully articulating the limits of what our experiments suggest, not relying on such simple phrases. Only after this problem is fully understood and more rigorous language is demanded, can we finally interpret experimental results in an accurate way.

Cite DOI Published version Featured article in Nature
January 0001
“Racial Laundering?” The Neighborhood Consequences of Large-Scale Investor Activity in Single-Family Real Estate
“Racial Laundering?” The Neighborhood Consequences of Large-Scale Investor Activity in Single-Family Real Estate

Abstract The recent entry of institutional investors in single-family real estate provides a unique opportunity to investigate long-standing questions on the broader mechanics of discrimination. A decomposition of price effects rooted in race suggests the potential existence of “laundering,” where financial intermediaries can arbitrage off the racial penalties previously documented in the literature. This setting allows further exploration of the mechanics of tastes for discrimination, the role of artificial intelligence (AI) in financial intermediaries, and consequences of market power. Furthermore, counterfactuals from a dynamic structural model show how the rise of institutional investors can shape neighborhood demographics. Ultimately, the results suggest that institutional entry and its demographic consequences demand a more nuanced view than previously considered.

January 0001
“Local Government Bidding for Large Manufacturing Firms in a Real Option Framework”

Abstract Abstract coming soon!

January 0001
Why Have City Centers Not Regained Their Pre-Pandemic Commercial Value?

Abstract Why have city centers not regained their pre-pandemic commercial value? Using lease-level commercial rent data through 2025, we document a persistent decline in the rent premia associated with CBD proximity and employment density and show that this pattern is partly explained by the widespread adoption of work from home (WFH).

January 0001
Filtering in Commercial Real Estate

Abstract While considerable evidence exists that residential properties host increasingly lower income tenants as they age, little analogous evidence exists for commercial properties. Using comprehensive data on commercial leasing and occupancy, this paper shows evidence of filtering in commercial real estate. Each year, the typical office property early in its life cycle depreciates by about 0.9 percent. Since leased space per user declines by about 2 percent per year while employment declines by 1.5 percent per year, buildings become more intensively used as they age. These changes are due entirely to shifts in the mix of tenants as buildings age. Tenants in older buildings are less productive and have higher labor shares with only about one-fifth of these shifts accounted for by changes in building industrial composition with age.