Stock Exchange Seats as Capital Assets
University of Rochester, Rochester, NY 14627
and National Bureau of Economic Research
Journal of Financial Economics, 4 (January 1977) 51-78
Stock exchange seats are important assets for securities brokers since they
provide access to centralized secondary trading markets for corporate
securities at a reduced cost. This paper provides empirical evidence
on the dynamic behavior of monthly New York and American Stock Exchange
seat prices over the 1926-72 period. Specifically, evidence is presented which:
(a) is consistent with a multiplicative random walk model for seat prices;
(b) indicates that unexpected changes in the prices of exchange-listed
stocks or in the volume of shares traded on the exchange are important new
information about the value of seats in each month; and (c) indicates that
the market for seats is efficient in assimilating new information and quickly
incorporates new information into the prices of seats. In addition, I
examine the effect of the infrequent trading of seats on the statistical
properties of the models.
Key words: Stock exchange seats, Regulation, Volume, Efficient markets,
Nonsynchronous trading
JEL Classifications: G14
Cited 19 times in the SSCI through April 1996
© Copyright 1977, Elsevier
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