Behavioral Finance Insights into Land Management: Decision Aggregation and Real Estate Market Dynamics in China

Sung-woo Cho and Jin-young Jung ()
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Sung-woo Cho: College of Business, Gachon University, Seongnam-si 13120, Republic of Korea
Jin-young Jung: College of Business Administration, Inha University, Incheon 22212, Republic of Korea

Land, 2024, vol. 13, issue 9, 1-21

Abstract: The interplay between land management and real estate market dynamics is critical for sustainable development. This study employs behavioral finance theory to explore how irrational behaviors among key market participants, including developers, consumers, and brokers, influence housing prices in China. By examining decision aggregation processes and sociocultural influences, we identify significant behavioral factors such as overconfidence, herding behavior, and availability bias that contribute to real estate price fluctuations. Our empirical analysis, based on data from 2001 to 2018, reveals how these behaviors impact market outcomes and provides insights for improving land administration systems. The findings offer valuable perspectives for policy and strategy development aimed at stabilizing housing markets, promoting sustainable real estate practices, and supporting the achievement of sustainable development goals (SDGs). This research underscores the importance of integrating behavioral finance into land management to enhance the efficiency and security of land tenure systems.

Keywords: real estate; sustainable development; behavioral finance; decision aggregation; herding effect; availability bias (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2024
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