Conference Agenda

Supercenters and warehouse clubs have grown rapidly in the US in recent decades. These big-box retail establishments are physically large to enable one-stop shopping offering a broad range of product categories with relatively low prices. In this paper, we study how the entry of these big-box stores affect household consumption and welfare. We first present an event study of the store entries of four major big-box retail chains to provide empirical evidence that households change various dimensions of their shopping behavior, such as product varieties per shopping trip and prices paid, in ways that are strongly consistent with store characteristics. We then develop a novel multi-store multi-category choice model to quantify and disentangle the effects of product variety, prices, and other store characteristics on consumer welfare. We show that households benefit substantially from consuming in supercenters relative to competing retailers, highlighting the importance of the store format.

This paper studies the strategic product differentiation of Hong Kong’s restaurants during a major political event started in June 2019. Due to the rise of political consumerism during the political event, Hong Kong’s restaurants were color coded as yellow restaurants that supported the anti-establishment camp, blue restaurants that supported the pro-establishment camp, and green restaurants that did not show a clear political stance. Based on a rich dataset of over 20,000 restaurants in Hong Kong, we find that the yellow and blue restaurants, which have mutually exclusive consumer groups, tend to locate geographically close to each other. The results suggest that geographic location has played an important role in Hong Kong’s restaurants’ products differentiation. Thus, our results support the spatial models where geographic distance appears in consumers’ preference function but are inconsistent with the aspatial models where restaurants interact indirectly with all other restaurants in an aggregate market.

Previous models of tenant composition in shopping malls have focused on traditional anchor and non-anchor retailers who sell similar merchandise. With the changing preferences of mod- ern shoppers who seek unique and entertaining experiences, this paper introduces a new type of store known as “specialty stores” that o↵er experiential consumption. Using a dynamic game model that considers the trade-o↵ between the benefits of agglomeration and the costs of com- petition, we re-examine the tenant optimization problem faced by mall owners in the current retail environment. Our findings show that specialty stores have a significant impact on the optimal tenant mix and the rent revenue of developers. This paper provides valuable insights into the optimal tenant composition for large-scale shopping centers that cater to contemporary consumers.

This paper empirically tests the existence of risk premiums for holding “green” real estate portfolios in the Real Estate Investment Trusts (REIT) markets. We use the data from the Leadership in Energy and Environmental Design (LEED) certification, a widely used green building rating system, to identify “green” buildings in the portfolios of the US REITs and global REITs for the period from January 2000 to December 2019. Our results show that stock markets add risk premiums associated with “greenness” of real estate portfolios of into REIT stock prices after controlling for other systematic risk premia, such as market, value (HML), size (SMB) and profitability risk factors. The US REIT market discounts (negative) “Green” premiums by 0.166% to 0.253% per month, and the global REIT discounts the “green” risk factor by 0.441% to 0.528% after controlling for all other systematic risk premia. Most importantly, we find that being “green” is significantly priced into REIT stock prices through the value (i.e book to market (B/M)) channel and that green premiums are not found in all REITs, but only in REITs that have relatively lower B/M ratios.