Campbell, Gareth (2010): Cross-Section of a ‘Bubble’: Dividends during the British Railway Mania.
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Although historical asset price ‘bubbles’ are often attributed to irrationality, the empirical analysis of such episodes has been limited. This paper examines a period known as the British Railway Mania, using a new dataset and a cross-sectional methodology which is unique to the study of historical asset price reversals. The results suggest that investors successfully incorporated forecasts of short-term dividend changes into their valuations, but were unable to predict longer-term changes. When short-term growth is controlled for, it appears that the railways were priced consistently with the non-railways for almost the entire episode. These findings may imply that investors had imperfect foresight, but that they acted consistently.
|Item Type:||MPRA Paper|
|Original Title:||Cross-Section of a ‘Bubble’: Dividends during the British Railway Mania|
|Keywords:||bubbles, financial crises, Railway Mania|
|Subjects:||G - Financial Economics > G1 - General Financial Markets > G12 - Asset Pricing ; Trading Volume ; Bond Interest Rates
G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions
N - Economic History > N2 - Financial Markets and Institutions > N23 - Europe: Pre-1913
G - Financial Economics > G0 - General > G01 - Financial Crises
|Depositing User:||Gareth Campbell|
|Date Deposited:||01. Jul 2010 00:39|
|Last Modified:||14. Feb 2013 20:22|
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Cross-Section of a ‘Bubble’: Stock Prices and Dividends during the British Railway Mania. (deposited 05. Apr 2010 02:21)
Cross-Section of a ‘Bubble’: Stock Prices and Dividends during the British Railway Mania. (deposited 20. Apr 2010 20:37)
- Cross-Section of a ‘Bubble’: Dividends during the British Railway Mania. (deposited 01. Jul 2010 00:39) [Currently Displayed]
- Cross-Section of a ‘Bubble’: Stock Prices and Dividends during the British Railway Mania. (deposited 20. Apr 2010 20:37)