What Drives the Property Price-Trading Volume Correlation? Evidence from a Commercial Real Estate Market

Posted: 14 Jan 2005

See all articles by Charles Ka Yui Leung

Charles Ka Yui Leung

The Chinese University of Hong Kong (CUHK) - Department of Economics

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.

Keywords: Trading volume, housing price, search, captial market imperfection, different degree of severity

JEL Classification: R30, R31

Suggested Citation

Leung, Ka Yui Charles, What Drives the Property Price-Trading Volume Correlation? Evidence from a Commercial Real Estate Market. Journal of Real Estate Finance and Economics, Vol. 31, No. 2. Available at SSRN: https://ssrn.com/abstract=648702

Ka Yui Charles Leung (Contact Author)

The Chinese University of Hong Kong (CUHK) - Department of Economics ( email )

Shatin, N.T.
Hong Kong
+852-2609-7158 (Phone)
+852-2603-5805 (Fax)

HOME PAGE: http://www.cuhk.edu.hk/eco/staff/kyleung

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