Asymmetric Price Response to Supply: Evidence from Singapore
Abstract
Prices in the Asian residential property markets have skyrocketed over the past decade. A high rate of economic growth is one of the major reasons for the price spiral. Most Asian residential property markets are, however,concentrated and national in nature. Maintaining an artificially high price level through coordination amongst producers is not impossible and would be the natural choice of oligopolistic behavior (Scherer and Ross, 1990). This study examines price responses to changes in economic determinants in Singapore. The focus is on supply. Cointegration and error-correction techniques are employed to test if upward and downward adjustment speeds are similar. The results verify the impact of GDP growth, but also show that price response to the supply of housing units is significantly downward rigid. This is not inconsistent with the hypothesis of collusive price setting by property developers.Download Info
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Article provided by Asian Real Estate Society in its journal International Real Estate Review.
Volume (Year): 1 (1998)
Issue (Month): 1 ()
Pages: 45-63
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Postal: Asia Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA
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Web page: http://www.asres.org/
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Postal: Asian Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA
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Web: http://www.asres.org/
Related research
Keywords: Property price rigidity; Singapore; Oligopoly;Find related papers by JEL classification:
- L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Rahul Verma & Priti Verma, 2005. "Do Emerging Equity Markets Respond Symmetrically to US Market Upturns and Downturns? Evidence from Latin America," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 4(3), pages 193-208, December.
- Bahng, Joshua Seungwook & Shin, Seung-myo, 2003. "Do stock price indices respond asymmetrically?: Evidence from China, Japan, and South Korea," Journal of Asian Economics, Elsevier, vol. 14(4), pages 541-563, August.
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