Abstract
The significant price-trading volume correlation found in the residential property market presents a challenge to the rational expectation hypothesis. Existing theories account for this fact with either capital market imperfection (down-payment effect or loss-aversion consideration) or imperfect information (search theoretic models). This paper employs data from a commercial real estate market, which face a different degree of severity of capital market constraint than the residential market, and thus provide an indirect but effective test for alternative theories. Policy implications are also discussed. © 2005 Springer Science + Business Media, Inc.
| Original language | English |
|---|---|
| Pages (from-to) | 241-255 |
| Journal | Journal of Real Estate Finance and Economics |
| Volume | 31 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - Sept 2005 |
| Externally published | Yes |
Research Keywords
- Capital market imperfection
- Different degree of severity
- Housing price
- Search
- Trading volume
Policy Impact
- Cited in Policy Documents
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