Research On Degree Of Real Estate Bubbles Of China Based On Partial Equilibrium Measure Method

China's Real estate price has been growing rapidly since2004. How serious areChina's real estate bubbles at the present stage? What about the difference betweenChina's real estate bubbles at the present stage and Hong Kong's in1997? What factorsmight inflate mainland China's and Hong Kong's real estate bubble? This paper willdiscuss these questions.On one hand, it is not only related to the severity of real estate bubbles but alsorelate to the degree of influences of outer factors whether real estate bubble bursts, onthe other hand, there are various ways to calculate real estate bubbles. These reasonslead to that there is not a clear line of the degree of real estate bubbles to specificwhether real estate bubble bursts. This paper studies the seriousness of Chinese realestate bubbles by comparing the degree of real estate bubbles at different times and indifferent districts.First, using the latest statistical data, this paper calculates the degree of Chinesereal estate bubbles by two econometrics models. The calculations of the two modelsboth show that the degree of Chinese real estate bubbles at the present stage is not onlylower than1993but also lower than other years.Second, this paper makes some reasonable adjustment to the way calculating thedegree of real estate bubbles based on partial equilibrium measure model, and calculatesthe degree of real estate bubble mainland China and coastal districts and inland districtsand Hong Kong. Our research shows that the degree of Chinese real estate bubble in2009and2007was higher than in previous years, but still lower than in1993, and muchlower than that of Hong Kong in1997. The degree of real estate bubbles of inlandprovinces and cities is generally lower, but the degree of real estate bubbles of coastalprovinces and cities is relatively higher.Third, this paper optimizes the degree model of real estate bubbles based on partialequilibrium measure, and makes up the defect of this model on average social profit rateand cost function, and re-calculates the degree of real estate bubbles of mainland Chinaand coastal districts and inland districts and Hong Kong. This paper further tests above conclusions by the widely used indicator method. Our research shows that the degree ofChinese real estate bubbles at present stage is not lower than1993, but still much lowerthan that of Hong Kong in1997. The degree of real estate bubbles of inland provincesand cities is generally lower, but the degree of real estate bubbles of coastal provincesand cities is relatively higher. The study result of the indicator method further supportsabove conclusions.Finally, using Copula theory, this paper analyzes the nonlinear relation betweendegree of real estate bubbles and its influence factors. Our research shows that althoughthe unit cost of buildings completed, urban population and income level are allimportant fundamental factors influencing housing price, the relation of these factorsand the degree of real estate bubble in Hong Kong is of negative or weak correlation.There is a high up-tail correlation between degree of real estate bubbles in Hong Kongand factors influencing speculative demand of real estate. The situation in mainlandChina is the antipode of that in Hong Kong.