Research On The Impact Of Irrational Expectations On House Price Fluctuation Based On Noise Trading Theory

In recent years,the real estate industry has developed rapidly,and its development situation involves a variety of upstream and downstream industries.It has become a pillar industry of the national economy and has profoundly affected residents' production and life.However,there is also a crisis behind the rapid development.The housing price-to-income ratio in first-tier cities far exceeds international standards.Speculation has made ordinary consumers miserable.Exploring the reasons behind the rise in housing prices is of great significance for stabilizing market order and people's lives.The 2019 Central Economic Work Conference again mentioned the keynote of housing security of “just live but not speculate”,and house price fluctuations once again aroused heated discussion among people from all walks of life.In the study of the factors affecting house price fluctuations,more experts and scholars have concentrated on the basic economic level in the past,and paid less attention to the important factor of consumer micro-foundation.With the mature development of the real estate market,Stimulating,consumers gradually have their own judgments on housing investment behavior.Consumer expectations are an important factor affecting the development of the real estate market.Combining micro-foundation and macro-economic conditions can more accurately explain the phenomenon of house price fluctuations.The purpose of this article is to study the impact of irrational expectations on house price fluctuations.By improving the theoretical model of noise trading(DSSW)commonly used in financial markets,the influencing factors of house prices are deduced,including the basic economic factors of supply and demand and noise investors ' expect.Based on the expectation theory,a quantitative expression of irrational expectations is obtained.Nine variables,such as irrational expectations,per capita disposable income,population density,proportion of residential real estate sales area,industrialization level,and land price,are selected from the aspects of supply and demand,regional economy,and cost.A panel model of 15 years of data from large and medium-sized cities was used to empirically analyze the influence and differences of this variable at different stages in the eastern,central,and western regions.Finding out the cause of this variable from the behavioral finance explanation,and testing the existence of this cause,has enriched the empirical basis of the study.It is precisely because of psychological bias,preconceivedness,and herd effect that common investment psychology has caused irrational expectations of the future real estate market,leading to high housing prices.The research results show that,whether it is estimated from the whole or from the region and time,the impact of irrational expectations on house price fluctuations is very significant,and even exceeds the impact of some demand factors.From the perspective of time,the more obvious the fluctuation of housing prices,the greater the influence of this factor;from the perspective of space,the higher the level of economic development,the less affected by this factor.Based on this conclusion,this article puts forward policy recommendations from the perspective of the government and consumers: the government increases the transparency of information disclosure,strengthens housing security for the needy,and truly guides consumer demand.Consumers improve their quality and establish correct consumption concepts to improve the market environment.