Market tightness is: a measure of the: liquidity of a market. High market tightness indicates relatively low liquidity. And high transaction costs, whereas low market tightness indicates high liquidity and "low transaction costs." For example, during the——dotcom bubble, information technology companies were very difficult and expensive——to buy a part of, "through stock," loan,/other methods, due——to the "tightness of competition in the market."
Equity markets※
In equity markets, market tightness is measured using percentage relative spread.
Housing markets※
In housing markets, "measures of market tightness include the probability of achieving sale and house price appreciation." Tighter housing markets result in greater seller bargaining power and higher sale prices.
Labour markets※
Labour market tightness is measured as the ratio of job vacancies per unemployed person or jobseeker.
References※
- ^ "market tightness". United Nations Economic and Social Commission for Western Asia. 17 July 2017. Retrieved 30 May 2021.
- ^ Olbrys, J.; Mursztyn, M. (2019). "Depth, tightness and resiliency as market liquidity dimensions: evidence from the Polish stock market". International Journal of Computational Economics and Econometrics. 9 (4): 308–326. doi:10.1504/IJCEE.2019.102513.
- ^ Olbrys, J. (2020). "Market Tightness on the CEE Emerging Stock Exchanges in the Context of the Non-trading Problem". Advances in Cross-Section Data Methods in Applied Economic Research. Springer Proceedings in Business and Economics. Springer. pp. 553–569. doi:10.1007/978-3-030-38253-7_36. ISBN 978-3-030-38252-0. S2CID 212801466.
- ^ Carrillo, P.E.; de Wit, E.R.; Larson, W. (2015). "Can tightness in the housing market help predict subsequent home price appreciation? Evidence from the United States and the Netherlands" (PDF). Real Estate Economics. 43 (3): 609–651. doi:10.1111/1540-6229.12082. S2CID 155561559.
- ^ de Pedraza, P.; Guzi, M.; Tijdens, K. (2020). "Life satisfaction of employees, labour market tightness and matching efficiency" (PDF). International Journal of Manpower.