Case Shiller Index, How does Standard and Poor make money off it?


Shiller created a company, Case Shiller Weiss, to produce the index periodically with the intent of selling the information to the markets. Fiserv, an information management company, bought Case Shiller Weiss in 2002 and, together with Standard & Poor’s, developed tradable indices based on the data for the markets which are now commonly called the Case–Shiller index.[2] CoreLogic acquired the Case Shiller Weiss business from Fiserv in April 2013.

why would anyone buy it out and make a freely available index?

My guess is they do one or more of the follwoing:

Sell extra data or insight

Sell data in a form that can be thrown in Excel, OLS, R… whatever

I dont get why Fiserv bought it, or why C0re logix is buying it (for $661M?)

Okay, Found the answer on core logix site…

CoreLogic® recently announced that Case-Shiller® joined CoreLogic. This addition to the CoreLogic property valuation and trends suite of solutions strengthens the comprehensive, industry-leading data, analytics, and services available to our clients.

The CoreLogic Case-Shiller Indexes include:

  • Over 6,000 indexes covering states, counties, metros and ZIP codes across the US
  • 30 year home price forecasts for all indexes
  • Custom Index set for S&P Dow Jones Indices

CoreLogic Case-Shiller Indexes help securities investors, mortgage banks, servicing operations, and government agencies make property valuations, assess and manage risk, mitigate losses, and control appraisal quality. They include the CoreLogic Case-Shiller HPI™, Default Correction Factors, and Home Price Forecasts—which allow you to:

  • Track residential real estate trends
  • Manage price risk within specific U.S. markets
  • Value loan portfolio collateral
  • Estimate default probabilities and loss severity within specific markets
  • Determine firm capital sufficiency

As a compliment to CoreLogic Case-Shiller Indexes, we offer a number of ancillary advisory services, market research information, and delivery capabilities.

Not sure how it works in the specific case of Case-Shiller, but 1) they can sell subscriptions to the data. Even if they make the Case-Shiller composite freely accessible, often times they make sub-indexes (like specific metropolitan regions) a paid subscription. So the general index gets attention, and then investors with money buy the sub-index subscriptions.

Some firms also make money selling products tied to the index, even if the index is freely available (i.e. the index is available, but a related unit makes money selling derivatives based on it, or license fees or something). They may be able to sell index-tied products even if they don’t own the index, but the risk is reduced (what happens to the product line if a competitor suddenly stops publishing the index your products are based on).

There may be other thigns too, but these came to mind.