Study on Income Heterogeneous Expectations and Commercial Housing Price Fluctuations – Analysis Based on Regions of the East and the West in China

Abstract:

The purpose of this paper is to analysis the effects of residents income, income heterogeneous expectations, housing price changes expectations on housing price fluctuations. The paper firstly adopts adaptive expectation method to quantify income heterogeneous expectations, based on the 2003-2012 relevant data of 23 provinces and autonomous regions of the East and the West, constructs the spatital model, and compares with the rational expectation method. Income of residents, income heterogeneous expectations and housing price changes expectations are set as explanatory variables, commodity housing price as dependent variable. The conclusion is drawn that that the increasing of income, income heterogeneous expectations and housing price changes expectations promotes commodity housing price, and the significance of adaptive expectation method in the research of expectation and housing price fluctuations is indicated.

• Periodical: Advanced Materials Research (Volumes 1079-1080)
• Pages: 1203-1207
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.1079-1080.1203
• Online since: December 2014
• Authors: Feng Lan, Yu Chao Wang*
• Keywords: Commodity Residential House Price Fluctuations, Housing Price Changing Expectations, Income Heterogeneous Expectations, Spatial Econometrics

References

[1] Song Z, Favara. House price dynamics with heterogeneou expectations. Society for Economic Dynamics 2009 Meeting Papers, No. 775. 2009. pp.1-41.

[2] Zhao Hua-Ping，Zhang Suo-Di. An empirical study of income heterogeneous expectations effect on housing prices. Economic Review, 2012. (2): 105-115.

[3] Clayton, J. Rational expectations, market fundamentals and housing price volatility. Real State Econmics, No. 4, 1996. pp.441-470.

DOI: 10.1111/1540-6229.00699

[4] Shen Yue, Liu Hong-Yu. Housing prices and economic fundamentals: an empirical study of 1995-2002 years Chinese 14 city. Economic Research, 2004. (6): 78-86.

[5] Ren Rong-Rong, Zheng Si-Qi, Long Fen-Jie. Mechanism of expectations on price: An empirical study on economic problems in35cities. Exploration of Economic Problems, 2008. (1): 541-841.

[6] Kuang Wei-Da. Real estate investment, real estate credit and China economic growth. Economic Theory and Economic Management, 2011. (1): 59-68.

[7] John Muellbauer and Authony Murphy, Booms and Busts in the UK housing Market. The Economic Journa, Vol. 107, No. 455. 1997. pp.1701-1727.

DOI: 10.1111/j.1468-0297.1997.tb00076.x

[8] Kuang Wei-Da. Expectations, speculation and China city house price fluctuations. Economic Research, 2010. (9): 67-78.

[9] Zhang Ya-Li, Liang Yun-Fang, Gao Tie-Mei. Expected income, rate of return and price fluctuations, according to state of dynamic panel model of 35 cities. Finance and Trade Economics, 2011. (1): 122-129.