Reputation and Asset Prices: Evidence from Trump Real Estate
We assess the impact of #brandreputation on asset prices, focusing on Donald Trump's presence in Manhattan real estate. Analyzing from mid-2015 to 2022, we find a 19% markdown on condos in Trump-branded buildings due to controversies around his candidacy. The drop was swift and substantial, indicating the relevance of #reputationalrisk in pricing. Using #twitter data, a 1-standard-deviation increase in our reputation indicator forecasts a 6% discount. Tax data shows no benefits, and property values fell by $1.1 billion, underlining the importance of considering reputational risk in #riskmanagement.