Speculative Investors and Tobin's Tax in the Housing Market

44 Pages Posted: 6 Sep 2013

See all articles by Yuming Fu

Yuming Fu

National University of Singapore

Wenlan Qian

National University of Singapore - NUS Business School

Bernard Yin Yeung

National University of Singapore - Business School

Date Written: September 2013

Abstract

This paper examines the impact of a policy change in Tobin's tax on housing market speculators. The policy intervention effectively raised the transaction cost in the market segment with a high presence of speculators. Relative to the unaffected control sample, we find that the rise in transaction cost substantially reduced speculative trading activities in the treatment sample. However, it significantly raised its price volatility and reduced the price informativeness. We further show that the unintended consequences are likely due to a relatively greater withdrawal by informed speculators than by destabilizing speculators after the transaction cost increase.

Suggested Citation

Fu, Yuming and Qian, Wenlan and Yeung, Bernard Yin, Speculative Investors and Tobin's Tax in the Housing Market (September 2013). NBER Working Paper No. w19400. Available at SSRN: https://ssrn.com/abstract=2321452

Yuming Fu (Contact Author)

National University of Singapore ( email )

4 Architecture Drive
Department of Real Estate
Singapore, 117566
Singapore
(65) 6874 7100 (Phone)
(65) 6774 8684 (Fax)

HOME PAGE: http://profile.nus.edu.sg/sde/rstfuym

Wenlan Qian

National University of Singapore - NUS Business School ( email )

15 Kent Ridge Drive
Singapore 117592, 119245
Singapore
(65) 65163015 (Phone)

HOME PAGE: http://sites.google.com/site/wenlanqian/

Bernard Yin Yeung

National University of Singapore - Business School ( email )

15 Kent Ridge Drive
BIZ 1 Level 6
Singapore, 119245
Singapore
65 6516 3075 (Phone)
65 6779 1365 (Fax)

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