A new financial asset (Allotment Trading Unit or ATU) that allows a firm to pollute was issued to a number of Chicago firms in 2000 as part of a cap‐and‐trade model to reduce emissions in the Chicago area. A model of this market was developed to enable us to: 1.) Estimate equilibrium...

This study develops the economic rationale for the inclusion of new environmental financial assets, tradable pollution rights, in a well‐diversified portfolio. These new assets are generated and their valuation determined in the market‐incentive environmental regulatory approach called...

Purpose – The purpose of this paper is to test empirically the extent to which differences in property taxes are capitalized in the market prices of industrial real estate. Design/methodology/approach – This paper is a multiple regression study of the selling prices of 419 industrial...

Purpose – The purpose of this paper is to test empirically the extent to which differences in property taxes are capitalized in the market prices of industrial real estate. Design/methodology/approach – This paper is a multiple regression study of the selling prices of 419 industrial...

In this paper the capital asset pricing model is extended to include the local property tax, the corporate income tax, and a borrowing rate that increases with the percentage of property value borrowed. The optimal percentage to borrow increases with the risk‐free interest rate and the...

The assumption of variable asset supply is incorporated into the standard capital asset pricing model because of consistent and strong empirical results showing that equity is issued when share prices are high. The results of the model show that the “beta” of the asset is influenced by both...