Discount Point Concessions: Reply and Further Evidence

Discount Point Concessions: Reply and Further Evidence Journal of Real Estate Finance and Economics, 19:3, 263±265 (1999) # 1999 Kluwer Academic Publishers, Boston. Manufactured in The Netherlands. Discount Point Concessions: Reply and Further Evidence PAUL K. ASABERE, FORREST E. HUFFMAN School of Business and Management, Temple University, Philadelphia, PA Professor Clauretie raises a number of points in his comments on our article (Asabere and Huffman, 1997). Our replies follow: (1) Professor Clauretie correctly notes that our illustration of the tax effects of points should be calculated as 28 percent of the value of the deductible points rather than by using …1ÿ 0.28†. Using the correct method generates a tax savings of $896, not our $2,304. Thus the total bene®t in Table 1 (Asabere and Huffman, 1997, p. 263) is $4,712 and not our $6,120. We regret this error. It must be noted, however, that the objective of Table 1 is to af®rm that there are potential cash bene®ts over the ``classic'' case. The amounts illustrated in Table 1 are not indicative of our data. The illustration has no effect, nor is it affected by our empirical results in any way whatsoever. (2) A second, more interesting, issue raised by Professor Clauretie is that our illustration in http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Real Estate Finance and Economics Springer Journals

Discount Point Concessions: Reply and Further Evidence

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Publisher
Springer Journals
Copyright
Copyright © 1999 by Kluwer Academic Publishers
Subject
Economics; Regional/Spatial Science; Financial Services
ISSN
0895-5638
eISSN
1573-045X
D.O.I.
10.1023/A:1007840829061
Publisher site
See Article on Publisher Site

Abstract

Journal of Real Estate Finance and Economics, 19:3, 263±265 (1999) # 1999 Kluwer Academic Publishers, Boston. Manufactured in The Netherlands. Discount Point Concessions: Reply and Further Evidence PAUL K. ASABERE, FORREST E. HUFFMAN School of Business and Management, Temple University, Philadelphia, PA Professor Clauretie raises a number of points in his comments on our article (Asabere and Huffman, 1997). Our replies follow: (1) Professor Clauretie correctly notes that our illustration of the tax effects of points should be calculated as 28 percent of the value of the deductible points rather than by using …1ÿ 0.28†. Using the correct method generates a tax savings of $896, not our $2,304. Thus the total bene®t in Table 1 (Asabere and Huffman, 1997, p. 263) is $4,712 and not our $6,120. We regret this error. It must be noted, however, that the objective of Table 1 is to af®rm that there are potential cash bene®ts over the ``classic'' case. The amounts illustrated in Table 1 are not indicative of our data. The illustration has no effect, nor is it affected by our empirical results in any way whatsoever. (2) A second, more interesting, issue raised by Professor Clauretie is that our illustration in

Journal

The Journal of Real Estate Finance and EconomicsSpringer Journals

Published: Sep 30, 2004

References

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