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Speculative trading in Chinese housing market: a panel regression method

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  • Zhenxi Chen
  • Cuntong Wang

Abstract

The major Chinese cities experienced dramatic increases in their house prices in the recent years. This paper derives the fundamental value of the housing markets based on the personal disposable income of individual cities. By controlling macroeconomic variables and government intervention, we detect speculative trading based on fundamental value and historical price movements. Fundamentalists expect house prices to converge to the fundamental values while chartists hold a momentum trading expectation. Further differentiating the cities into tier-1 and non-tier-1, the non-tier-1 cities are found to be subject to a risk of plummeting arising from the interaction terms between the fundamentalists and chartists.

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  • Zhenxi Chen & Cuntong Wang, 2020. "Speculative trading in Chinese housing market: a panel regression method," Applied Economics, Taylor & Francis Journals, vol. 52(38), pages 4186-4195, July.
    • Handle: RePEc:taf:applec:v:52:y:2020:i:38:p:4186-4195
    DOI: 10.1080/00036846.2020.1733473
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    Cited by:

    1. Lu Liu & Linda Qiu & Yuanyuan Yang, 2022. "Urban housing prices within a core urban agglomeration in China," SN Business & Economics, Springer, vol. 2(11), pages 1-38, November.

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