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The residential market of Hong Kong: rational or irrational?

Xiao, Qin; Liu, Yunhua


Yunhua Liu


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. © 2010 Taylor & Francis.


Xiao, Q., & Liu, Y. (2010). The residential market of Hong Kong: rational or irrational?. Applied economics, 42(7), (923-933). doi:10.1080/00036840701720960. ISSN 0003-6846

Journal Article Type Article
Acceptance Date Jan 1, 2010
Publication Date Mar 1, 2010
Print ISSN 0003-6846
Electronic ISSN 1466-4283
Publisher Taylor & Francis (Routledge)
Peer Reviewed Peer Reviewed
Volume 42
Issue 7
Article Number PII 901881433
Pages 923-933
Keywords Economics and Econometrics
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