Has SARS infected the property market? Evidence from Hong Kong☆
Identifieur interne : 001222 ( Pmc/Corpus ); précédent : 001221; suivant : 001223Has SARS infected the property market? Evidence from Hong Kong☆
Auteurs : Grace WongSource :
- Journal of Urban Economics [ 0094-1190 ] ; 2007.
Abstract
This paper uses the 2003 Hong Kong Severe Acute Respiratory Syndrome (SARS) epidemic as a natural experiment to investigate how housing markets react to extreme events. A panel data set of large-scale housing complexes (estates) is used to exploit the cross-sectional variation in the spread of SARS to estimate the effect of the disease on real estate prices and sales. SARS risk is measured by: (1) the estate-level SARS infection rate, (2) news reports, and (3) government announcements of infections. The average price declines by 1–3 percent if an estate is directly affected by SARS, and by 1.6 percent for all estates as a result of the outbreak of the disease. A back-of-the-envelope calculation of the expected price fall under the rational asset-pricing model implies that the economic value of life consistent with the SARS-related price movement was less than $1 million. This low figure contrasts with the predictions of overreaction from psychological and behavioral economics theories. An analysis of transaction volume suggests that the absence of price overreaction is likely to be related to housing market characteristics, including transaction costs, credit constraints and loss aversion.
Url:
DOI: 10.1016/j.jue.2006.12.007
PubMed: NONE
PubMed Central: 7133336
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<record><TEI><teiHeader><fileDesc><titleStmt><title xml:lang="en">Has SARS infected the property market? Evidence from Hong Kong<sup><xref ref-type="fn" rid="d32e271">☆</xref></sup></title><author><name sortKey="Wong, Grace" sort="Wong, Grace" uniqKey="Wong G" first="Grace" last="Wong">Grace Wong</name></author></titleStmt><publicationStmt><idno type="wicri:source">PMC</idno><idno type="pmc">7133336</idno><idno type="url">http://www.ncbi.nlm.nih.gov/pmc/articles/PMC7133336</idno><idno type="RBID">PMC:7133336</idno><idno type="doi">10.1016/j.jue.2006.12.007</idno><idno type="pmid">NONE</idno><date when="2007">2007</date><idno type="wicri:Area/Pmc/Corpus">001222</idno><idno type="wicri:explorRef" wicri:stream="Pmc" wicri:step="Corpus" wicri:corpus="PMC">001222</idno></publicationStmt><sourceDesc><biblStruct><analytic><title xml:lang="en" level="a" type="main">Has SARS infected the property market? Evidence from Hong Kong<sup><xref ref-type="fn" rid="d32e271">☆</xref></sup></title><author><name sortKey="Wong, Grace" sort="Wong, Grace" uniqKey="Wong G" first="Grace" last="Wong">Grace Wong</name></author></analytic><series><title level="j">Journal of Urban Economics</title><idno type="ISSN">0094-1190</idno><idno type="eISSN">0094-1190</idno><imprint><date when="2007">2007</date></imprint></series></biblStruct></sourceDesc></fileDesc><profileDesc><textClass></textClass></profileDesc></teiHeader><front><div type="abstract" xml:lang="en"><p>This paper uses the 2003 Hong Kong Severe Acute Respiratory Syndrome (SARS) epidemic as a natural experiment to investigate how housing markets react to extreme events. A panel data set of large-scale housing complexes (estates) is used to exploit the cross-sectional variation in the spread of SARS to estimate the effect of the disease on real estate prices and sales. SARS risk is measured by: (1) the estate-level SARS infection rate, (2) news reports, and (3) government announcements of infections. The average price declines by 1–3 percent if an estate is directly affected by SARS, and by 1.6 percent for all estates as a result of the outbreak of the disease. A back-of-the-envelope calculation of the expected price fall under the rational asset-pricing model implies that the economic value of life consistent with the SARS-related price movement was less than $1 million. This low figure contrasts with the predictions of overreaction from psychological and behavioral economics theories. An analysis of transaction volume suggests that the absence of price overreaction is likely to be related to housing market characteristics, including transaction costs, credit constraints and loss aversion.</p></div></front><back><div1 type="bibliography"><listBibl><biblStruct></biblStruct><biblStruct><analytic><author><name sortKey="Case, K E" uniqKey="Case K">K.E. Case</name></author><author><name sortKey="Shiller, R J" uniqKey="Shiller R">R.J. Shiller</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Cho, M" uniqKey="Cho M">M. Cho</name></author></analytic></biblStruct><biblStruct></biblStruct><biblStruct></biblStruct><biblStruct><analytic><author><name sortKey="Holtgrave, D" uniqKey="Holtgrave D">D. Holtgrave</name></author><author><name sortKey="Weber, E U" uniqKey="Weber E">E.U. Weber</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Kahneman, D" uniqKey="Kahneman D">D. Kahneman</name></author><author><name sortKey="Tversky, A" uniqKey="Tversky A">A. Tversky</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Kahneman, D" uniqKey="Kahneman D">D. Kahneman</name></author><author><name sortKey="Tversky, A" uniqKey="Tversky A">A. Tversky</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Krainer, J" uniqKey="Krainer J">J. Krainer</name></author></analytic></biblStruct><biblStruct></biblStruct><biblStruct><analytic><author><name sortKey="Morris, S" uniqKey="Morris S">S. Morris</name></author><author><name sortKey="Shin, H S" uniqKey="Shin H">H.S. Shin</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Poterba, J M" uniqKey="Poterba J">J.M. Poterba</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Roback, J" uniqKey="Roback J">J. Roback</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Skantz, T R" uniqKey="Skantz T">T.R. Skantz</name></author><author><name sortKey="Strickland, T H" uniqKey="Strickland T">T.H. Strickland</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Slovic, P" uniqKey="Slovic P">P. Slovic</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Stein, J C" uniqKey="Stein J">J.C. Stein</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Viscusi, K" uniqKey="Viscusi K">K. Viscusi</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Viscusi, K" uniqKey="Viscusi K">K. Viscusi</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Viscusi, K" uniqKey="Viscusi K">K. Viscusi</name></author></analytic></biblStruct><biblStruct><analytic><author><name sortKey="Wheaton, W C" uniqKey="Wheaton W">W.C. Wheaton</name></author></analytic></biblStruct><biblStruct></biblStruct></listBibl></div1></back></TEI><pmc article-type="research-article"><pmc-dir>properties open_access</pmc-dir>
<front><journal-meta><journal-id journal-id-type="nlm-ta">J Urban Econ</journal-id><journal-id journal-id-type="iso-abbrev">J Urban Econ</journal-id><journal-title-group><journal-title>Journal of Urban Economics</journal-title></journal-title-group><issn pub-type="ppub">0094-1190</issn><issn pub-type="epub">0094-1190</issn><publisher><publisher-name>Elsevier Inc.</publisher-name></publisher></journal-meta><article-meta><article-id pub-id-type="pmc">7133336</article-id><article-id pub-id-type="publisher-id">S0094-1190(07)00009-5</article-id><article-id pub-id-type="doi">10.1016/j.jue.2006.12.007</article-id><article-categories><subj-group subj-group-type="heading"><subject>Article</subject></subj-group></article-categories><title-group><article-title>Has SARS infected the property market? Evidence from Hong Kong<sup><xref ref-type="fn" rid="d32e271">☆</xref></sup></article-title></title-group><contrib-group><contrib contrib-type="author"><name><surname>Wong</surname><given-names>Grace</given-names></name><email>wongg@wharton.upenn.edu</email><xref rid="cor001" ref-type="corresp">⁎</xref></contrib></contrib-group><aff>Wharton School of Business, University of Pennsylvania, 1463 Steinberg-Dietrich Hall, The Wharton School, 3620 Locust Walk, Philadelphia, PA 19104-6302, USA</aff><author-notes><corresp id="cor001"><label>⁎</label>Fax: +1 (215) 573 2220. <email>wongg@wharton.upenn.edu</email></corresp></author-notes><pub-date pub-type="pmc-release"><day>1</day><month>2</month><year>2007</year></pub-date><pmc-comment> PMC Release delay is 0 months and 0 days and was based on .</pmc-comment>
<pub-date pub-type="ppub"><month>1</month><year>2008</year></pub-date><pub-date pub-type="epub"><day>1</day><month>2</month><year>2007</year></pub-date><volume>63</volume><issue>1</issue><fpage>74</fpage><lpage>95</lpage><history><date date-type="received"><day>3</day><month>4</month><year>2006</year></date><date date-type="rev-recd"><day>15</day><month>12</month><year>2006</year></date></history><permissions><copyright-statement>Copyright © 2007 Elsevier Inc. All rights reserved.</copyright-statement><copyright-year>2007</copyright-year><copyright-holder>Elsevier Inc.</copyright-holder><license><license-p>Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active.</license-p></license></permissions><abstract><p>This paper uses the 2003 Hong Kong Severe Acute Respiratory Syndrome (SARS) epidemic as a natural experiment to investigate how housing markets react to extreme events. A panel data set of large-scale housing complexes (estates) is used to exploit the cross-sectional variation in the spread of SARS to estimate the effect of the disease on real estate prices and sales. SARS risk is measured by: (1) the estate-level SARS infection rate, (2) news reports, and (3) government announcements of infections. The average price declines by 1–3 percent if an estate is directly affected by SARS, and by 1.6 percent for all estates as a result of the outbreak of the disease. A back-of-the-envelope calculation of the expected price fall under the rational asset-pricing model implies that the economic value of life consistent with the SARS-related price movement was less than $1 million. This low figure contrasts with the predictions of overreaction from psychological and behavioral economics theories. An analysis of transaction volume suggests that the absence of price overreaction is likely to be related to housing market characteristics, including transaction costs, credit constraints and loss aversion.</p></abstract><kwd-group><title>Keywords</title><kwd>SARS</kwd><kwd>Housing prices</kwd><kwd>Overreaction</kwd><kwd>Shocks</kwd><kwd>Epidemics</kwd></kwd-group></article-meta></front><back><ref-list><title>References</title><ref id="bib001"><label>1</label><mixed-citation publication-type="other">W. Burns, P. Slovic, R.E. Kasperson, J. Kasperson, O. Renn, S. 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Wong, Is SARS a poor man's disease? Housing values, living conditions and health status, Mimeo, The Wharton School, 2004</mixed-citation></ref></ref-list><fn-group><fn id="d32e271"><label>☆</label><p>This is an update of the first chapter of my PhD thesis at Princeton University.</p></fn></fn-group></back></pmc></record>Pour manipuler ce document sous Unix (Dilib)
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