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An Empirical Study on the Cognitive Biases of The Korea Real Estate Market Through the Testing of Prospect Theory

  • Korea Real Estate Review
  • 2017, 27(1), pp.7-16
  • Publisher : korea real estate research institute
  • Research Area : Social Science > Law > Law of Special Parts > Law of Real Estate
  • Published : March 31, 2017

jeong seong hoon 1 Park, Keun Woo 2

1대구가톨릭대학교
2한양대학교

Accredited

ABSTRACT

In this study, we examine whether there are prospect theory investment patterns for individual investors in the real estate market. We use the maximum potential profit rate and the maximum potential loss rate of individual investors as a research method and additionally analyze it using the Jeong and Park(2015) model. As a result of the analysis, it was found that the investment pattern according to the prospect theory and disposition effect for individual investors. And we find the difference between zoning areas. This difference in investment behavior is believed to be due to the purpose of the real estate and the existence of rent fee, which creates a difference in investment behavior depending on the purpose. The limitations of this study are the analysis measurement of potential profit and potential loss using the land price index like the study of jeong and Park(2015). This implies that a new property price index needs to be developed or a benchmark for real estate assets is needed for deeper study of real estate investment sentiment.

Citation status

* References for papers published after 2023 are currently being built.

This paper was written with support from the National Research Foundation of Korea.