CINDY K. SOO Assistant Professor of Finance, Ross School of Business, University of Michigan

Transcription

1 CINDY K. SOO Stephen M. Ross Business School phone: (734) University of Michigan fax: (734) Tappan Ave Ann Arbor, MI ACADEMIC APPOINTMENTS: Assistant Professor of Finance, Ross School of Business, University of Michigan EDUCATION: Ph.D. Applied Economics, The Wharton School, University of Pennsylvania, May 2013 Dissertation: Essays in Household Finance and Housing Economics M.S. Applied Economics, The Wharton School, University of Pennsylvania, 2011 B.A. Economics and Mathematics, Emory University, summa cum laude, 2005 Phi Beta Kappa (2004) RESEARCH AND TEACHING FIELDS: Real Estate Finance, Behavioral Finance, Financial Media, Household Finance, Applied Econometrics PUBLICATIONS: How Financial Literacy Affects Household Wealth Accumulation, American Economic Review P&P, 2012, Volume 102, pages (with Olivia S. Mitchell and Jere Behrman) Voluntary Contributions to a Dynamic Public Good: Experimental Evidence, Economics Letters, Volume 98, Issue 1, January 2008, pages (with Charles Noussair) WORKING PAPERS: (see below for full abstracts) Quantifying Animals Spirits: News Media and Sentiment in the Housing Market ASSA Meetings Paper, Boston, January 2015 Timing the Housing Market (w. Todd Sinai) ASSA Meetings Paper, Philadelphia, January 2014 Financial Literacy, Schooling, and Wealth Accumulation (w. Olivia Mitchell, Jere Behrman) - NBER Working Paper, No (AER Publication Longer Version) Rare Disaster Risk Premia in the Housing Market (w. Serhiy Kozak, Tarun Ramadorai, Jerry Tsai) WORK IN PROGRESS Start Spreading the News: Contagious Sentiment Across Local Housing Markets

2 TEACHING: 2014, 2015 Real Estate Finance & Investments (MBA), Ross School of Business Average Teaching Evals: 4.2/ , 2015 Real Estate Finance & Investments (BBA), Ross School of Business Average Teaching Evals: 4.6/ Managerial Economics (MBA) (TA), Wharton Risk Management (MBA, Undergraduate, and Law) (TA), Wharton HONORS, AWARDS, FELLOWSHIPS: NTT Fellowship Award, University of Michigan (Finance) 2014 American Real Estate and Urban Economics Homer Hoyt Best Dissertation Award Connie K. Duckworth Doctoral Fellowship, Wharton 2011 American Finance Association Meeting Doctoral Student Grant 2011 NBER Household Finance Fall and Summer Doctoral Student Grant 2010 Russell Sage Foundation Summer Institute Fellow in Behavioral Economics 2009 Yale Summer Institute Fellow in Behavioral Finance Bradley Foundation Doctoral Fellowship, Wharton Dean s Fellowship for Distinguished Merit, University of Pennsylvania S.S. Huebner Foundation Doctoral Fellowship, Wharton Robert T. Jones, Jr. Scholarship, Emory University (awarded to 4 graduating seniors for outstanding scholarship and citizenship for a year abroad at University of St. Andrews) 2005 National Science Foundation Graduate Research Honorable Mention 2004 Marshall Scholarship Finalist 2004 Rhodes Scholarship Semi-Finalist Robert C. Byrd Scholarship, Emory University Dean s Achievement Scholarship, Emory University PRESENTATIONS: (*scheduled, **post-job market) 2015 American Finance Association Annual Meetings Boston, University of Michigan (Management & Operations) 2014 NBER Behavioral Finance Workshop Chicago, University of California-Davis Annual Symposium Information and Asset Prices (by invitation), Duisenberg School of Finance Workshop in Behavioral Finance, American Economic Association Annual Meetings Philadelphia (paper presentation and discussant), American Finance Association Annual Meetings (discussant), Financial Intermediation Research Society Conference Quebec City (discussant), Financial Management Association Annual Meetings Nashville, Center for Law, Finance, and Policy University of Michigan, European Winter Finance Summit Zermatt, 3 rd Annual University of Michigan Economics and Finance Day, University of Michigan Hosmer-Hall Lunch Seminar Series 2013 University of Michigan (Ross), Harvard Business School, University of California- Berkeley, New York University (Stern), Washington University in St. Louis (Olin), University of Illinois at Urbana-Champaign, HEC Paris, University of Miami, Michigan State University, George Mason University, Federal Reserve Bank of Boston, Federal

3 Reserve Bank of Philadelphia, Queen s University (Belfast)*, NBER Economics of Real Estate & Local Public Finance* 2012 Federal Reserve Bank of Chicago Summer Workshop in Money, Banking, and Finance, Wharton Finance Brown Bag Seminar, Wharton Applied Economics Seminar 2011 Wharton Applied Economics Summer Seminar, London Business School TransAtlantic Doctoral Conference 2010 Yale University Whitebox Graduate Student Conference, London Business School TransAtlantic Doctoral Conference, London Business School 2005 Economic Science Association Annual Meetings Montreal REFEREE: Journal of Finance, Review of Financial Studies, Journal of Monetary Economics, Management Science, Journal of Urban Economics, Real Estate Economics, Journal of Pension Economics, Economic Development and Cultural Change SERVICE: 2015 Homer-Hoyt Best Dissertation Award Selection Committee, Ross Finance Junior Faculty Committee, Mitsui Finance Seminar Series (Co-organizer) 2014 Mitsui Finance Seminar Series (Co-organizer), 22 nd Mitsui Finance Symposium on Nonstandard Preference and Beliefs, Ross Finance Junior Faculty Committee PROFESSIONAL EMPLOYMENT: Research Assistant, Economics, American Enterprise Institute Research Assistant, Macro Policy Team, Federal Reserve Bank of Atlanta MEDIA COVERAGE: Wall Street Journal Want to Know Where Home Prices Are Headed? Read the Papers (Sept 2013) Chronicle of Higher Education How Small Changes Are Improving Gender Balance at One Business School (Dec 2014) Dividend Magazine What Are You Thinking About? (Spring 2014) ABSTRACTS: Quantifying Animals Spirits: News Media and Sentiment in the Housing Market Sentiment or animal spirits has long been posited as an important determinant of asset prices, but measures of sentiment are difficult to construct and often confounded by asset fundamentals. This paper provides a first empirical test of sentiment on the run-up and crash of housing prices that instigated the great financial crisis of I develop the first measures of sentiment across local housing markets by quantifying the positive and negative tone of housing news in local newspaper articles. I find that my housing sentiment index forecasts the boom and bust pattern of house prices

4 at a two year lead, and can predict over 70 percent of the variation in aggregate house price growth. Consistent with theories of investor sentiment, I find that my sentiment index not only predicts price variation but also patterns in trading volume. Estimated effects of sentiment are robust to an extensive list of observed controls including lagged fundamentals, lagged price growth, subprime lending patterns, and news content over typically unobserved variables. To address potential bias from latent fundamentals, I develop instruments from a subset of weekend and narrative articles that newspapers use to cater to sentiment but are plausibly exogenous to news on fundamentals. Estimates remain robust to instrumental variable estimation, suggesting bias from unobserved fundamentals is minimal. Timing the Housing Market (with Todd M. Sinai) We develop rigorous measures of the cost of owning and the cost of renting that enable us to compare the level of rents and ownership costs across MSAs. We show that households can predict whether renting or owning will end up being less expensive ex post. This exercise is more robust than trying to predict house price changes or housing returns because much of that uncertainty is inframarginal in the optimal own/rent decision, which depends only on the which tenure mode is cheaper. We show that households can profitably time the home ownership decision. Using several simple trading rules, we estimate that households can save as much as 50 percent of annual rental costs over a five-year period by timing the decision of when to buy a home. The potential savings varies across cities. Financial Literacy, Schooling, and Wealth Accumulation (with Olivia S. Mitchell, Jere Behrman) Financial literacy and schooling attainment have been linked to household wealth accumulation. Yet prior findings may be biased due to noisy measures of financial literacy and schooling, as well as unobserved factors such as ability, intelligence, and motivation that could enhance financial literacy and schooling but also directly affect wealth accumulation. We use a new household dataset and an instrumental variables approach to isolate the causal effects of financial literacy and schooling on wealth accumulation. While financial literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, our approach reveals even stronger and larger effects of financial literacy on wealth. Estimated impacts are substantial enough to suggest that investments in financial literacy could have large positive effects on household wealth accumulation. Start Spreading the News: Contagious Sentiment Across Local Housing Markets Seminal literature on speculative bubble often hypothesizes that beliefs are contagious and specifically spread through news stories. I empirically test a theory of contagious sentiment across local housing markets in the last housing bubble. Using measures of local housing market sentiment in a previous paper, I document the relative timing of sentiment booms across cities and find coordinated movements that suggest a contagion of sentiment across markets. I then specifically test a theory that news is a mechanism for contagious sentiment across markets. I exploit my dataset on local housing news and quantify the number of times a local newspaper mentions another city. I then examine the effect of this variable on measure of local housing demand to directly test whether this is a potential source of contagion. Results show that sentiment from other cities does have a significant impact on local housing returns, and that this effect is amplified by the number of times a newspaper reports on other cities. News media appears to be one mechanism through which sentiment spreads across local markets.

5 Rare Disaster Risk and Housing Returns (with Serhiy Kozak, Tarun Ramadorai, Jerry Tsai) Rare disaster models have emerged as a leading explanation for long-standing asset pricing puzzles, yet still face inherent challenges in verifying their implications with stock market data. This paper proposes the housing market as an opportune setting to estimate disaster risk premia from natural events such as earthquakes. While prior studies must infer disaster risk from asset prices, we are able to observe both the probability and magnitude of disaster exposure with direct scientific data. Furthermore, due to the varying geological structure underlying each area, our data allows us to observe significant variation in disaster risk exposure across detailed geographic locations. We find empirical support for theoretical models of rare disasters among housing returns, and estimate disaster risk premia from earthquakes both within and across geographic locations. Zip-codes that are exposed to greater earthquake risk yield greater returns in housing compared to low-risk zipcodes in the same county. We find evidence of disaster risk premia across different types of natural disasters, and that our estimates of disaster risk premia remain robust across a number of subsamples.