Study on Measuring Methods of Real Estate Speculative Bubble

Yifei Lai, Huawei Xu, Junping Jia

School of Economics and Management, WuhanUniversity, Wuhan, Hubei, China.

DOI: 10.4236/jssm.2009.21006                

Abstract

The paper analyses the causes of the bubble of the real estate, then elaborates real estate bubble theory based on specu-lation. This paper establishes a regression model of real estate’s price with relevant economic variables, and builds the econometric model to measure real estate’s speculative bubble. In application of the model for empirical research on real estate’s speculative bubble of Chongqing, the paper concludes that globally there is no bubble in Chongqing (but on the edge of bubble). Finally, by analyzing the common points about the existence of bubble, the paper indicates that real estate’s investment and macro-economic indexes are disjointed, and thus the investment is excessive, which can in turn corroborate the conclusions obtained by the measuring model.

Keywords

real estate, speculative bubble, measuring model of speculative bubble, overinvestment

Conflicts of Interest

The authors declare no conflicts of interest.

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