The residential market of Hong Kong

rational or irrational?

Qin Xiao, Yunhua Liu

    Research output: Contribution to journalArticle

    6 Citations (Scopus)

    Abstract

    The current study attempts to investigate the proposition that Hong Kong
    residential market is only driven by a rational speculative bubble, in addition to fundamentals. The fundamentals are chosen according to the present value model, but will account for latent private information. Potential roles of other public information are also explored. The study finds that the influence of the rational bubble on the price growth is highly significant. However, in contrast to Seoul and Singapore housing market (Xiao, 2006; Xiao and Huang, 2007), neither the fundamentals, nor the rational bubble can explain much of the price growth in the market of concern. This finding leaves large room for questioning whether or not this
    market is more prone to irrationality than its counterparts in Seoul and Singapore.
    Original languageEnglish
    Pages (from-to)923–933
    Number of pages11
    JournalApplied Economics
    Volume42
    Issue number7
    Early online date31 Oct 2007
    DOIs
    Publication statusPublished - 2010

    Fingerprint

    Rational bubbles
    Singapore
    Hong Kong
    Irrationality
    Present value model
    Speculative bubbles
    Public information
    Private information
    Housing market

    Keywords

    • speculative bubble
    • rational
    • irrational
    • latent information

    Cite this

    The residential market of Hong Kong : rational or irrational? / Xiao, Qin; Liu, Yunhua.

    In: Applied Economics, Vol. 42, No. 7, 2010, p. 923–933.

    Research output: Contribution to journalArticle

    Xiao, Qin ; Liu, Yunhua. / The residential market of Hong Kong : rational or irrational?. In: Applied Economics. 2010 ; Vol. 42, No. 7. pp. 923–933.
    @article{9a794943d7b449a68af82d3f32ad64d2,
    title = "The residential market of Hong Kong: rational or irrational?",
    abstract = "The current study attempts to investigate the proposition that Hong Kong residential market is only driven by a rational speculative bubble, in addition to fundamentals. The fundamentals are chosen according to the present value model, but will account for latent private information. Potential roles of other public information are also explored. The study finds that the influence of the rational bubble on the price growth is highly significant. However, in contrast to Seoul and Singapore housing market (Xiao, 2006; Xiao and Huang, 2007), neither the fundamentals, nor the rational bubble can explain much of the price growth in the market of concern. This finding leaves large room for questioning whether or not this market is more prone to irrationality than its counterparts in Seoul and Singapore.",
    keywords = "speculative bubble, rational , irrational , latent information",
    author = "Qin Xiao and Yunhua Liu",
    year = "2010",
    doi = "10.1080/00036840701720960",
    language = "English",
    volume = "42",
    pages = "923–933",
    journal = "Applied Economics",
    issn = "0003-6846",
    publisher = "Routledge",
    number = "7",

    }

    TY - JOUR

    T1 - The residential market of Hong Kong

    T2 - rational or irrational?

    AU - Xiao, Qin

    AU - Liu, Yunhua

    PY - 2010

    Y1 - 2010

    N2 - The current study attempts to investigate the proposition that Hong Kong residential market is only driven by a rational speculative bubble, in addition to fundamentals. The fundamentals are chosen according to the present value model, but will account for latent private information. Potential roles of other public information are also explored. The study finds that the influence of the rational bubble on the price growth is highly significant. However, in contrast to Seoul and Singapore housing market (Xiao, 2006; Xiao and Huang, 2007), neither the fundamentals, nor the rational bubble can explain much of the price growth in the market of concern. This finding leaves large room for questioning whether or not this market is more prone to irrationality than its counterparts in Seoul and Singapore.

    AB - The current study attempts to investigate the proposition that Hong Kong residential market is only driven by a rational speculative bubble, in addition to fundamentals. The fundamentals are chosen according to the present value model, but will account for latent private information. Potential roles of other public information are also explored. The study finds that the influence of the rational bubble on the price growth is highly significant. However, in contrast to Seoul and Singapore housing market (Xiao, 2006; Xiao and Huang, 2007), neither the fundamentals, nor the rational bubble can explain much of the price growth in the market of concern. This finding leaves large room for questioning whether or not this market is more prone to irrationality than its counterparts in Seoul and Singapore.

    KW - speculative bubble

    KW - rational

    KW - irrational

    KW - latent information

    U2 - 10.1080/00036840701720960

    DO - 10.1080/00036840701720960

    M3 - Article

    VL - 42

    SP - 923

    EP - 933

    JO - Applied Economics

    JF - Applied Economics

    SN - 0003-6846

    IS - 7

    ER -