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Housing Price Dispersion: An Empirical Investigation

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  • Charles Ka-Yui Leung
  • Youngman Chun Fai Leong
  • Siu Kei Wong

Abstract

The efficiency of a market is challenged when price dispersion occurs. Previous studies focused on non-durable consumption goods. This study extends the analysis to the case of residential property, whose transactions are dominated by a second-hand market with many potential buyers and sellers. We demonstrate that housing price dispersion exists, and the degree of dispersion changes systematically with some macroeconomic factors, though the second and the third moment of the price distribution react differently to the macroeconomic variables. Some directions for future research are suggested.

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Bibliographic Info

Paper provided by Chinese University of Hong Kong, Department of Economics in its series Departmental Working Papers with number _167.

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Date of creation: Jul 2005
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Handle: RePEc:chk:cuhked:_167

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Keywords: price dispersion; search models; macroeconomic factor; time aggregation;

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