Working papers

Risk attitude and capital market participation: is there a gender investment gap in Germany? (with J.-C. Fey, O. Lerbs and M. Weber)

Do women invest differently from men? We try to contribute to the answer of this question by analyzing the Panel on Household Finance (PHF) of the German Bundesbank. This representative panel collects a wide variety of behavioral and financial variables in the area of household finance. Using the 2014 wave, we find that participation in risky assets is generally lower among women than among men. Once risk attitude is controlled for, this effect significantly diminishes. It disappears when single women are compared to single men---conditional on other demographical variables. Given participation in the market, we only find a weak effect for gender in the whole sample, which again disappears for the group of singles. Within their risky assets, men invest more into certificates whereas women invest more into funds.

Presented at:

  • 3rd Household Finance Workshop in Heimbuchenthal, Germany, October 2018 (presented by co-author)

Home is where the health is: housing and adult height, 1870-1965

Poor sanitation and overcrowding have severe impact on the disease environment. This study analyzes the impact of housing quality on physical health, proxied by adult height, during the late 19th and the first half of the 20th centuries. Using panel data on 14 advanced economies, the empirical results suggest that improved housing quality—proxied by rising housing prices—significantly contributed to human stature by reducing overcrowding and creating better hygienic standards. To be precise, a one-standard-deviation increase in real house prices translated to 1–1.2 cm taller adult heights—an amount which at that time was associated with 1.2 to 2.1 years of additional life expectancy on average. Also, 15 percent of the average height increase of 10 cm across all countries can be attributed to housing quality. These findings are robust even when we control for income.

Presented at:

  • Conference of the European Real Estate Society (ERES) in Reading, UK, June 2018
  • Annual Conference of the Economic History Society (EHS) in Keele, England, April 2018 (view press release here)
  • Conference of the American Real Estate and Urban Economics Association (AREUEA) at the Annual Meeting of the Allied Social Sciences Association (ASSA) in Philadelphia, USA, January 2018 (poster)

Homeownership: Boon and Bane

I study the relationship between per-capita GDP growth and the homeownership rate in a panel of 21 industrialized countries during the period 2000--2014 to examine whether investments in housing have different consequences for an economy than investments in non-housing. I use an IV approach because homeownership is highly endogenous. After controlling for a number of variables to reduce further endogeneity problems, I find evidence for an initially positive impact of homeownership on the economy, as suggested by studies on positive externalities of owner-occupied housing. However, there is a critical homeownership rate after which this relationship becomes inverse; i.e., the relationship between homeownership and GDP growth is hump-shaped: the negative externalities appear to outweigh the positive ones starting at a homeownership rate of roughly 68 percent. Hence, owner-occupied housing should not be encouraged beyond this socially optimal rate, as the returns to housing may be lower than those to non-housing. While a slight deviation from the optimal point has little effect on GDP, which is the case for the U.S., German-speaking and southern European countries could gain by adjusting their homeownership rates.

Presented at:

  • RWTH Aachen Brown Bag Seminar in Aachen, Germany, July 2018
  • International Conference of the American Real Estate and Urban Economics Association (AREUEA) in Amsterdam, Netherlands, July 2017
  • 6th Ioannina Meeting on Applied Economics and Finance in Corfu, Greece, June 2016
  • 2nd International Conference on Applied Macro, Theory and Empirical Finance in Thessaloniki, Greece, May 2016

House Prices in the Presence of an Up-front Capital Subsidy for Low-income Home Buyers

The German secretary of housing and urban development recently proposed an up-front capital subsidy to help financially weaker families purchase a home in more expensive regions in Germany. This paper analyzes whether this subsidy is an appropriate policy instrument to achieve the desired goals by presenting an equilibrium model of prices of high- and low-priced houses. The question that this paper tries to answer is: Do subsidies for low-income home buyers make owning more affordable or could they also distort house prices? The model reveals that this subsidy will not only make owning for low-income households less affordable---it will also increase the prices of expensive houses that are not within reach of low-income households.


Stock Markets in Argentina: An Empirical Analysis of Market Efficiency, 1880-1913

This article investigates the price and return behaviour in the Argentine stock market from 1880 to 1913. The aim is to discover if returns of the listed firms’ stocks were predictable or not. This is put into practice by use of the augmented Dickey-Fuller test and the runs test developed by Wald and Wolfowitz. Both analyses will show that investors in the Argentine equity market were not able to make systematic excess returns by using past information for their prediction of prices.


Work in progress or preparation

The odd one out: asset uniqueness and price precision (with T. Lindenthal)

The role of real estate and reverse mortgages for retirement income and wealth of German households

Firm clustering and commercial real estate rents (with J. Cohen)

Coming to terms with ambiguous asset dimensions: quality, beauty and uniqueness in the built environment (with T. Lindenthal)

House prices in Frankfurt since 1290 (with T. Lindenthal)

House prices in Scotland, 1800–1940



American Real Estate and Urban Economics Association

Urban Economics Association

American Economic Association 

Economic History Society

Regional Studies Association


Teaching cases in economics and finance

Schmidt, C. (2016). A Journey Through Time: From the Present Value to the Future Value and Back Or: Retirement Planning: A Comprehensible Application of the Time Value of Money Concept. American Journal of Business Education 9 (3), 137–143. 

Schmidt, C. (2016). Burgernomics: An Instructional Case on the Law of One Price. Journal of Business Case Studies 12 (2), 77–82.

Moersch, M. and C. Schmidt (2015). Of Haircuts and Extensions: An Analysis of Greek Government Debt. International Research Journal of Applied Finance VI  (8), 1–11. 

Schmidt, C. and T. Azarmi (2015). The Impact of CoCo Bonds on Bank Value and Perceived Default Risk: Insights and Evidence from Their Pioneering Use in Europe. Journal of Applied Business Research 31(6), 2297–2306.