Stock Exchange Seats as Capital Assets
G. William Schwert
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,
JEL Classifications: G14
Cited 36 times in the SSCI and SCOPUS through 2017
© Copyright 1977, Elsevier
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