The impact of UK household overconfidence in public information on house prices

Soosung Hwang, Youngha Cho and Jinho Shin

Journal of Property Research, 2020, vol. 37, issue 4, 360-389

Abstract: We investigate if house prices are affected by the overconfidence of households who predict house prices using imperfect public information about economic outlook. For this purpose, we develop a new measure of household overconfidence in the Bayesian framework. For the three variables we test – changes in consumption, stock returns, and changes in human capital, we find that UK households were overconfident about the signals of consumption regardless of regions. However, households in London were overconfident about the signals of stock markets whereas those remote from London were overconfident about the signals of human capital. The results of household overconfidence appear positive in the UK housing market for our sample period from 1980 to 2018, in particular, 0.5% per quarter in London.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/09599916.2020.1790631 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jpropr:v:37:y:2020:i:4:p:360-389

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJPR20

DOI: 10.1080/09599916.2020.1790631

Access Statistics for this article

Journal of Property Research is currently edited by Bryan MacGregor

More articles in Journal of Property Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().