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Housing Price Dispersion: An Empirical Investigation

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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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Authors and Affiliations

  1. Department of Economics and Finance, City University of Hong Kong, Kowloon Tong, Hong Kong, China

    Charles Ka Yui Leung

  2. Department of Economics, Chinese University of Hong Kong, Shatin, Hong Kong, China

    Youngman Chun Fai Leong

  3. Department of Real Estate and Construction, The University of Hong Kong, Pokfulam, Hong Kong, China

    Siu Kei Wong

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  1. Charles Ka Yui Leung
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  2. Youngman Chun Fai Leong
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  3. Siu Kei Wong
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Correspondence to Charles Ka Yui Leung.

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Leung, C.K.Y., Leong, Y.C.F. & Wong, S.K. Housing Price Dispersion: An Empirical Investigation. J Real Estate Finan Econ 32, 357–385 (2006). https://doi.org/10.1007/s11146-006-6806-7

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