Research On The Influence Of Investor Sentiment On Herd Behavior In Real Estate Housing Market

Since the reform in 1998,the real estate industry in China has experienced a leap-forward development and has become a pillar industry in the national economy.However,in recent years,there have been problems such as excessive housing prices and market bubbles.The irrational factors of market buyers are the important reasons for the problem.Herding behavior is one of the important irrational factors and has a non-negligible impact on rising house prices and market bubbles.Therefore,analyzing the causes of herding behavior and give corresponding suggestions have important theoretical and practical significance.The existing research on the causes of herding behaviors in the real estate market was relatively few.The existing ones were only analyzed from the perspective of information asymmetry and interest rate policy.There was no analysis of herd behavior from the perspective of micro-individual sentiment.This article intends to analyze the causes of herding behaviors in the real estate housing market from the perspective of microscopic individual sentiment.First,We chose three new sentiment proxy variables:n.Then we used the principal component analysis method to construct a investor sentiment ew construction floor area ratio,investment residential ratio and sales ratioindex that fits the Chinese real estate residential market and we verified the reliability of the investor sentiment index.Second,used the CCK model to test the existence,diversity,and symmetry of herding behavior in China's real estate residential market.Then.the unit root test,co-integration test.Granger causality test,and vector autoregressive VAR model were used to analyze the influence of micro-consumer sentiment on herd behavior.Finally,the monthly real estate market data from February 2012 to November 2017 was selected for empirical analysis.The result show that:(1)there are widespread herding behaviors in China's real estate housing market.However,there are differences in herd behavior among different cities,and the strength of herd behavior increases in the first-tier,new-tier and second-tier cities.In the state of rising and falling house prices,herding behavior is asymmetric.During the period of rising house prices,the herd behavior was significant,and the herd behavior was not significant at the time of falling house prices.However,for the first-tier cities,the situation was opposite.(2)There is a linkage relationship between investor sentiment and herd behavior in the real estate market.Specifically,investor sentiment and herd behavior in the real estate residential market are mutually exclusive Granger causes,but the impact of investor sentiment on herd behavior is more significant than the impact of herd behavior on investor sentiment.The results of the VAR model test show that investor sentiment in the lag phase is significantly negative to herd behavior,and the investor sentiment in the lag II is significantly positive to herd behavior.The herd behavior in the lag phase and lag II have a significant positive effect on investor sentiment.And investor sentiment and herd behavior will be affected by themselves.In general,there has been a mutual linkage between investor sentiment and herd behavior.