Who Says there is a High Consensus Among Analysts when Market Uncertainty is High? Some New Evidence from the Commercial Real Estate Market

Who Says there is a High Consensus Among Analysts when Market Uncertainty is High? Some New... This paper seeks to determine whether analyst consensus is a function of the level of price informativeness, and therefore attempts to gauge the extent to which analyst consensus is high when market uncertainty is high. There is the view that a small or declining volume of trading implies less information and lower quality information, and that a lower level of price informativeness will lead analysts to put more weight on their private information at the time of forecasting. We add to this view the notion that when uncertainty is high there might be a positive option value of waiting. In this case, it appears reasonable to conclude that analysts may actually lack consensus when uncertainty is high. If this hypothesis is correct, then one would expect the level of price informativeness to override the Keynesian incentive “to fail conventionally than to succeed unconventionally” or at least reduce its magnitude in periods of declining trading volume and low price discovery. Tests of this hypothesis produce favorable results. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Real Estate Finance and Economics Springer Journals

Who Says there is a High Consensus Among Analysts when Market Uncertainty is High? Some New Evidence from the Commercial Real Estate Market

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Publisher
Springer US
Copyright
Copyright © 2013 by Springer Science+Business Media New York
Subject
Economics / Management Science; Regional/Spatial Science; Finance/Investment/Banking
ISSN
0895-5638
eISSN
1573-045X
D.O.I.
10.1007/s11146-013-9430-3
Publisher site
See Article on Publisher Site

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