Amazon Is Coming to Town: Information and Housing Market Efficiency

Abstract

This study provides evidence of strong-form efficiency in the housing market, where prices fully incorporate private information. We use Amazon's progressive disclosure of its new headquarters locations in Virginia and New York to distinguish changes in the public's knowledge. Using a spatial difference-in-differences approach, we test whether housing prices increase before Amazon's public announcements. Housing prices near the Virginia headquarters exhibit 4.3% premia before Amazon's decision but no additional increase upon decision. Price premia for New York reach 17.5% before decision but disappear once Amazon cancels the headquarters. Other finalist cities exhibit no price premia, precluding the possibility of speculation.