Intercity Information Diffusion and Price Discovery in Housing Markets: Evidence from Google Searches

Posted: 28 Mar 2015

See all articles by Jing Wu

Jing Wu

Tsinghua University - Hang Lung Center for Real Estate; Tsinghua University - Department of Construction Management

Yongheng Deng

Wisconsin School of Business, University of Wisconsin-Madison

Date Written: March 26, 2015

Abstract

We provide an innovative measure of information flow in Chinese housing markets based on search records from the Internet search engine Google. The measure depicts a substantial flow of house-price related information from national "superstar" cities, such as Beijing and Shanghai, and regional "star" cities, such as Tianjin and Chongqing, to other "normal" cities. The empirical results based on Granger causality test and turning point detection analysis both suggest that such information diffusion is a key factor that influences the intercity house price discovery process in the short run. The "superstar" and "star" cities lead the country in terms newly-built house prices changes in the sample period between 2006 and 2011.

Keywords: Information diffusion; Price discovery; House price; Google searches

Suggested Citation

Wu, Jing and Deng, Yongheng, Intercity Information Diffusion and Price Discovery in Housing Markets: Evidence from Google Searches (March 26, 2015). Journal of Real Estate Finance and Economics, Vol. 50, No. 3, 2015. Available at SSRN: https://ssrn.com/abstract=2585571

Jing Wu

Tsinghua University - Hang Lung Center for Real Estate ( email )

HeShanHeng Building
Beijing, 100084
China

HOME PAGE: http://thuwujing.net

Tsinghua University - Department of Construction Management ( email )

Heshanheng Building
Tsinghua University
Beijing, 100084
China

HOME PAGE: http://thuwujing.net

Yongheng Deng (Contact Author)

Wisconsin School of Business, University of Wisconsin-Madison ( email )

4110 Grainger Hall
975 University Avenue
Madison, WI 53706
United States
+1 (608) 262-4865 (Phone)

HOME PAGE: http://https://bus.wisc.edu/faculty/yongheng-deng

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