Testing Alternative Theories of the Property Price-Trading Volume Correlation

Charles Leung, Garion C. K. Lau () and Youngman C. F. Leong ()
Additional contact information
Garion C. K. Lau: Chinese University of Hong Kong, Shatin, Hong Kong
Youngman C. F. Leong: Chinese University of Hong Kong, Shatin, Hong Kong

Journal of Real Estate Research, 2002, vol. 23, issue 3, 253-264

Abstract: This article examines the correlation between the real housing price and trading volume. Contrary to the predictions of standard rational expectation models, a robust positive correlation between the two variables is identified. While no clear lead-lag relationship is found in the raw data, which is more consistent with the downpayment effect model, the medium-run component of the trading volume tends to lead (and Granger cause) the corresponding component of the property price, which is more consistent with the search theoretic model. An explanation for this difference in behavior is suggested and several future research directions are provided.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (65)

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Journal Article: Testing Alternative Theories of the Property Price-Trading Volume Correlation (2002)
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