www.lesswrong.com/posts/xCWiFGezwMPswZ6Ea/is-gdp-a-kind-of-factory
2 corrections found
The $45 billion SoftBank Vision Fund
The SoftBank Vision Fund was not a $45 billion fund. $45 billion was the size of Saudi PIF’s planned commitment; SoftBank said the fund’s overall size could reach $100 billion and announced a first close with over $93 billion committed.
Full reasoning
This phrase conflates PIF's commitment with the size of the fund itself.
SoftBank's own October 14, 2016 press release said PIF would consider investing up to USD 45 billion in the SoftBank Vision Fund, while "the overall potential size of the Fund can go up to USD 100 billion." In other words, $45 billion was the planned Saudi contribution, not the size of the Vision Fund.
SoftBank then announced on May 22, 2017 that the Vision Fund had reached a first major closing with over USD 93 billion of committed capital. That directly contradicts the article's description of it as "The $45 billion SoftBank Vision Fund."
So the statement is incorrect as written: it understates the fund's size and misattributes one investor's commitment as the total size of the fund.
2 sources
- Establishment of SoftBank Vision Fund | SoftBank Group Corp.
SoftBank ... concluded a non-binding memorandum of understanding ... with the Public Investment Fund ... under which PIF will consider investing ... with the potential investment size of up to USD 45 billion ... The overall potential size of the Fund can go up to USD 100 billion.
- SoftBank Vision Fund's First Major Closing | SoftBank Group Corp.
SoftBank Group Corp. ... announces the first major closing of the SoftBank Vision Fund ... with over USD 93 billion of committed capital.
Davis and Palumbo (2006) estimated that land accounts for about 50% of US residential real estate value, up from 32% in 1984, and the trend has continued since.
Davis & Palumbo (2006) did not estimate land’s share for all U.S. residential real estate; they estimated it for 46 large U.S. metropolitan areas (an average across their city sample).
Full reasoning
The post attributes a nationwide estimate (“US residential real estate value”) to Davis & Palumbo (2006).
However, the Federal Reserve’s abstract for the paper (and the paper’s own title) makes clear the study is about “Large U.S. Cities” and that the 50%/32% figures are computed by “averaging across the cities in our sample”—i.e., across 46 large U.S. metropolitan areas, not the entire U.S. housing stock.
So the quoted sentence is incorrect as written: it overstates the geographic scope of the Davis & Palumbo estimate (metro-sample average vs. nationwide).
1 source
- FRB: FEDS paper 2006-25 — The Price of Residential Land in Large U.S. Cities (Davis & Palumbo, 2006)
"...we build a database ... for 46 large U.S. metropolitan areas from 1984 to 2004... Averaging across the cities in our sample, by year-end 2004, the value of residential land accounted for about 50 percent of the total market value of housing, up from 32 percent in 1984."