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Asymmetric Price Response to Supply: Evidence from Singapore



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.

Suggested Citation

  • Edward Ng, 1998. "Asymmetric Price Response to Supply: Evidence from Singapore," International Real Estate Review, Asian Real Estate Society, vol. 1(1), pages 45-63.
  • Handle: RePEc:ire:issued:v:01:n:01:1998:p:45-63

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    Cited by:

    1. 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.
    2. 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.

    More about this item


    Property price rigidity; Singapore; Oligopoly;

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services


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