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

Charles Leung and Dandan Feng

The Journal of Real Estate Finance and Economics, 2005, vol. 31, issue 2, 255 pages

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. Copyright Springer Science + Business Media, Inc. 2005

Keywords: trading volume; housing price; search; capital market imperfection; different degree of severity (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (35)

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DOI: 10.1007/s11146-005-1374-9

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