Bubble Test For Shanghai Housing Market

This paper investigates housing price bubble level in Shanghai by identifying price movements owing to fundamental components and speculative components, using multiple regressions.This paper first introduces background of China's real estate development process and the economic bubbles. Then previous and recent studies on Shanghai housing price bubbles are presented, followed with discussion on Shanghai housing price bubble using statistical model. The results show that there are severe price bubbles in the housing market in year 2004 and 2005. Finally, several policy implications are presented.