Research On The Influence Of Investors' Irrational Expectations On Changes In Housing Prices

In the 19th CPC National Congress,Xi Jinping insisted that we must not forget housing is for living in,not for speculation.After that,the regulation policy of the real estate market has been widely discussed.In particular,how to maintain the stability of house price has been widely concerned.But before solving this problem,it is necessary to make clear the formation mechanism of house price first.It is also necessary to find out what important factors affecting house prices are important,so as to find a way to stabilize house prices from the root.In order to explore the mechanism of the formation of house prices and the fundamental reasons for the change of house prices,a large number of literature had been read.It is found in the literature that the application of DSSW model in the real estate market can well explain the irrational expectations of real estate investors and the important influence of economic fundamentals on housing price changes.Based on the deductive reasoning of the improved DSSW model,it is found that irrational expectations have an important impact on the change of house prices.The inference of the model can also make a conclusion that the economic fundamentals also play an important role in the change of house prices.In order to explore the underlying reasons for the formation of irrational expectations of real estate investors,this paper explains the irrational expectations of noise investors from the perspective of behavioral economics.The research shows that investors' bias in cognition,emotion and volition when making investment decisions make their expectations for the future trend of housing prices showing irrational characteristics.At the same time,under the effect of feedback mechanism,the change of house price shows a characteristic of "sustained high and rapid decline".So as to test the above inference,this paper makes an empirical analysis based on the panel data of 14 years in 35 large and medium cities.First of all,this paper makes an empirical analysis of the relationship between irrational expectation and house price change.Secondly,this paper validates the existence and influence degree of the anchoring effect in the change of house price.Finally,this paper analyzes the role of feedback mechanism in the change of house prices.In the empirical analysis of irrational expectations and housing price changes,the following conclusions are drawn through the estimation of the fixed effect model.First,the irrational expectations based on the formation of historical price information have a significant impact on the rate of change in house prices.Secondly,the degree of influence of income,population and money supply on prices is greater than the influence of irrational expectation on the rate of house price change;Finally,there are significant differences in the intercept between the irrational expectations of 35 large and medium cities on the change of house prices.In the empirical test of anchoring effect,the system GMM estimation method of dynamic panel model is used.The empirical results show that when the real estate noise investors only use short-term historical price information to make investor decisions,they tend to ignore the influence of economic fundamentals on housing prices,and mainly refer to their irrational expectations for housing prices.In the empirical test of feedback mechanism,the dummy variable representing feedback effect is respectively included in the model containing the anchoring effect and the model containing irrational expectations.The results of the model show that the change of house prices is positive in the feedback mechanism.Although the effect is limited,but it is very significant.