Empirical study on herd behavior in the real estate market: volatility and insights in the post-pandemic era
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Empirical study on herd behavior in the real estate market: volatility and insights in the post-pandemic era

Wang Hexuan 1*
1 School of Management Science and Engineering, Central University of Finance and Economics, Beijing, China
*Corresponding author: 18131899185@163.com
Published on 16 September 2025
Journal Cover
JAEPS Vol.18 Issue 9
ISSN (Print): 2977-571X
ISSN (Online): 2977-5701
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Abstract

Herd behavior refers to the tendency of individuals to imitate others' behaviors or opinions rather than engaging in independent thinking when facing uncertainty or ambiguity. This phenomenon is extremely common in the fields of finance and economics. In view of the severe volatility exhibited by the real estate market in the post-pandemic period, this study focuses on the real estate market—particularly the herd behavior in China’s real estate market, which has experienced drastic fluctuations in recent years. The aim is to empirically verify the existence of such herd behavior and explore its influencing factors through empirical analysis. A Spatial Autoregressive Model (SAR) is employed, with variables including housing prices, personal disposable income, and one-year personal housing loan interest rates incorporated for modeling. The results indicate that significant herd behavior exists in the real estate market, and various factors exert influences on it to varying degrees. This study provides empirical evidence for understanding the operational mechanism of the real estate market and formulating reasonable policies.

Keywords:

real estate market, herd behavior, Spatial Autoregressive Model (SAR), influencing factors

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Hexuan,W. (2025). Empirical study on herd behavior in the real estate market: volatility and insights in the post-pandemic era. Journal of Applied Economics and Policy Studies,18(9),1-7.

References

[1]. Sun, Z. W., & Wang, R. (2024). A Study on the Relationship between Idiosyncratic Risk and Expected Returns in the Stock Market—From the Perspective of Investor Sentiment.Contemporary Economy, 41(12), 86–100.

[2]. Zheng, T. G., & Ge, H. Y. (2021). A Study on the Regime-Switching Time-Varying Characteristics of the Herd Effect in China’s Stock Market.Journal of Financial Research, (3), 170–187.

[3]. Shiller, R. J. (1995). Conversation, Information, and Herd Behavior.American Economic Review,85(2), 181–185.

[4]. Shiner. (2003). Herd Behavior and the Quality of Opinions.The Journal of Socio-Economics, 32(6), 661–673.

[5]. Li, X., Han, R. D., & Li, Y. (2023). A Study on the Impact of Individual Investors’ Attention on the Herd Effect in the Stock Market.Journal of Systems Science and Mathematics, 43(7), 1741–1769.

[6]. Peng, H. (2000). Herd Behavior under Information Asymmetry and the Micro-Structure Theory of Bubbly Financial Markets.Journal of Financial Research,(11), 5–19.

[7]. Banerjee, A. V. (1992). A Simple Model of Herd Behavior.Quarterly Journal of Economics,107(3), 797–817.

[8]. Seasholes, M. S., & Wu, G. (2007). Predictable Behavior, Profits, and Attention.Journal of Empirical Finance, 14(5), 590–610.

[9]. Bernales, A., Verousis, T., & Voukelatos, N. (2016). Do Investors Follow the Herd in Option Markets?Journal of Banking & Finance, 119, 104899.

[10]. Fama, E. F. (1970). Efficient Capital Markets: A Review of Theory and Empirical Work.Journal of Finance, 25(2), 383–417.

References

[1]. Sun, Z. W., & Wang, R. (2024). A Study on the Relationship between Idiosyncratic Risk and Expected Returns in the Stock Market—From the Perspective of Investor Sentiment.Contemporary Economy, 41(12), 86–100.

[2]. Zheng, T. G., & Ge, H. Y. (2021). A Study on the Regime-Switching Time-Varying Characteristics of the Herd Effect in China’s Stock Market.Journal of Financial Research, (3), 170–187.

[3]. Shiller, R. J. (1995). Conversation, Information, and Herd Behavior.American Economic Review,85(2), 181–185.

[4]. Shiner. (2003). Herd Behavior and the Quality of Opinions.The Journal of Socio-Economics, 32(6), 661–673.

[5]. Li, X., Han, R. D., & Li, Y. (2023). A Study on the Impact of Individual Investors’ Attention on the Herd Effect in the Stock Market.Journal of Systems Science and Mathematics, 43(7), 1741–1769.

[6]. Peng, H. (2000). Herd Behavior under Information Asymmetry and the Micro-Structure Theory of Bubbly Financial Markets.Journal of Financial Research,(11), 5–19.

[7]. Banerjee, A. V. (1992). A Simple Model of Herd Behavior.Quarterly Journal of Economics,107(3), 797–817.

[8]. Seasholes, M. S., & Wu, G. (2007). Predictable Behavior, Profits, and Attention.Journal of Empirical Finance, 14(5), 590–610.

[9]. Bernales, A., Verousis, T., & Voukelatos, N. (2016). Do Investors Follow the Herd in Option Markets?Journal of Banking & Finance, 119, 104899.

[10]. Fama, E. F. (1970). Efficient Capital Markets: A Review of Theory and Empirical Work.Journal of Finance, 25(2), 383–417.

Cite this article

Hexuan,W. (2025). Empirical study on herd behavior in the real estate market: volatility and insights in the post-pandemic era. Journal of Applied Economics and Policy Studies,18(9),1-7.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Journal: Journal of Applied Economics and Policy Studies

Volume number: Vol.18
Issue number: Issue 9
ISSN: 2977-5701(Print) / 2977-571X(Online)

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