Introduction to Special Issue: Topics Related to Real Estate Market Efficiency

The efficiency of the real estate market is a major concern for homeowners, investors, lenders, policymakers, and researchers. Modern academic literature has mostly moved beyond an early emphasis on formal tests of informational efficiency. The Grossman and Stiglitz (The American Economic Review 70:393-408, 1980) paradox holds that perfect informational efficiency is impossible and the joint hypothesis problem implies that market efficiency is not even testable. Instead, researchers now commonly examine the speed, accuracy, and persistence of price movements in response to new information, as the allocative efficiency of a market ultimately depends on its degree of informational (and operational) efficiency. This special issue is devoted to exploring these issues.

The impact of real estate investment on air quality: evidence from China

Ever since China's "housing reform" in 1998, the level of real estate investment in its cities has continued to rise, leading to the occupation of green space, rapid population concentration, and a severe mismatching of financial resources. At the same time, urban air quality has changed drastically for the worse, with PM2.5 becoming the primary air indicator of concern for many cities in recent years. The existing literature has obtained sufficient results on the influence factors of air pollution, but rarely presents the relationship between real estate investment and air pollution, especially using multiple cities as the sample. This paper thus examines the impact of real estate investment on air quality using a sample of 261 prefecture-level cities in China over the period 1999-2016 through several econometric models. First, the two-way fixed-effect model shows an inverted U-shaped relationship between PM2.5 concentration and real estate investment, but most cities have not yet crossed the turning point, and that real estate investment negatively impacts air quality. Second, the indirect effect of real estate investment on PM2.5 concentration comes from its non-linear impact on urban green coverage, population density, and industrial structure, which has been verified by Hayes and Preacher's (Behav Res 45:627-660, 2010) mediation effect with non-linear forms. Third, heterogeneity analysis indicates that an inverted U-shaped relationship also exists in the subsamples, and that real estate investment in cities with more people, higher GDP, and greater development level is more likely to increase rather than mitigate air pollution. Therefore, cities should promote the green development of real estate and related industries by enhancing environmental awareness, guide the population flow toward the coordinated development between real estate investment and population distribution, and encourage environmentally friendly technological progress via a better rational allocation of financial resources.