Media's Role In Price Variation Of Newly-built Commercial Housing

The drastic fluctuation of housing price is harmful to the smooth operation of the real estate market and the stable development of the economy.Therefore,it is of great significance to explore the causes of housing price variation,stabilize the price fluctuation,and establish a long-term mechanism for the healthy development of the real estate market.Previous studies have mostly explored the causes of housing price fluctuations from fundamental factors such as supply,demand and credit,which cannot fully explain the price variation.Psychological factors such as market expectation is regarded as one of the important reasons for pirce variation.The real estate market is a typical market with asymmetric and incomplete information,in which,market participants,especially those demanders who are in “information disadvantaged” position,need to make decisions on the basis of collecting and processing a large amount of information.Because of the advantages of convenience of channel and high degree of information authority,mass communication has become the main channel for the public to obtain information on the real estate market.Therefore,the news disseminated by the media often influences the suppliers and demanders' psychology,acts on their decision-making behaviors,thus affecting the real estate market.Logically speaking,relevant media reports are related to the real estate market.Due to the availability of context data and the universality of communication,this paper takes the reports of newspaper media and network media as samples for analysis.Due to the national conditions,China has established a newspaper system from the central,provincial to cities,and also differentiated into policy-oriented and marketoriented media.With the development of communication technology,network media has gradually become the main channel for the public to obtain information.Based on the influence of the media on the audience and the changes and differences of the media,how do national and urban newspaper media play a role in the changes of housing prices? What is the difference between the roles of newspapers with different orientations in housing price variation? With the development of information technology and the acceleration of transmission rate,is there any change in the role of newspapers and Internet media in the variation of housing price? The answers to these questions are helpful for us to understand the role of the media in the price variation of newly-built commercial housing,and of great significance to the construction of a long-term mechanism for the healthy development of the real estate market.The study analyzes the theory of media's role in the housing price variation from the perspectives of expectation theory,information asymmetry theory,agenda setting theory and silent spiral theory.The theoretical analysis of this paper proves that,firstly,the media,as information intermediaries,collect and disseminate market information,interpret professional information for suppliers and demanders,thus alleviating information asymmetry between them,and also reducing the information asymmetry between demanders themselves and suppliers themselves respectively.Secondly,mass media can affect housing price through influencing supplier and demanders' psychological expectation which is varing during the transmission process.Due to the interpretation and processing ability of information by subjects or other reasons,the expectation will expand or shrink under certain conditions,or reverse in the direction,and the expectation is sticky.Thirdly,the media's attention to real estate news topics and the reporting framework will play a role in the "agenda setting" of the public agenda.The more the media pay attention to real estate issues,the more the public will concern about it.Moreover,the reporting framework can influence the public's perception of the issues.Finally,the market sentiment rendered by the media will create a "silent spiral",and the dominant opinions will be further expanded,while the inferior opinions will be further narrowed,which will lead to housing prices being more volatile.Then this study analyzes the media reports' effcets on the newly built housing price in three ways.Firstly,media coverage influences the attention and sentiment of demanders on the housing market.Demanders follow media report and demanders themselves will also imitate each other becase of herding effect,which will force demanders moving in the same direction,thus unreasonably increasing or diminishing demands,leading to the price variation.Secondly,media acts as a common source of “infectious disease”which refers to the price expectation.Market participants' housing price expectation influenced by the media report will be incorporated into the housing price.Thirdly,the transmission speed of the news will affect the price response speed to the news.If the information transmission rate is slow,the price shock caused by house purchasing behavior by demanders will be small,resulting in insufficient response.However,if the information transmission rate is accelerated,some demanders will take advantage of the lack of response to carry out arbitrage,causing the rise of asset price and overreaction.Based on the analysis mentioned above,this paper draws four hypotheses that the price variation of newly built commercial housing will be affected by media attention,media sentiment,media orientation and media transmission rate.The quantitative processing of news context is the key to the analysis of the role of media playing in the variation of housing price.Based on the natural language processing and machine learning,the paper analyzes the emotional nature of nearly 200,000 real estate news articles and constructs two kinds of news variable indexes,namely,media attention and media sentiment.To test the hypotheses mentioned above,the paper has done three empirical studies based on IV-2SLS fixed-effect model and Time-Varing Parameter VAR(TVP-VAR)model for 35 large and medium cities panel data and national time series data.We have drawn some conclusions below:Firstly,in most cases,media attention on the real esate market will affect housing price reversely.For 35 large and medium cities as a whole,there is no siginificant effect exerting on the housing price of the media attention on the real estate market.In grouping study,for cities with high administrative level and high GDP,the attention on the housing market of Party newspapers will influence the housing price reversly.The possible reason is that the real estate market and the media development in these cities is relatively mature,and party newspapers' ability and motivation in reflectiong government intentions is superior to the metropolis daily.When facing with the increasing number of news reports,the city housing demanders may choose to wach aside in short term,thus forcing the housing developers to reduce the price and promote selling.A survey of four national newspapers also shows a similar phenomenon,with the reverse effect reaching a minimum in 2014.Then a study on baidu news shows that the reverse effect exerting on the housing price of the media attention reduced gradually after the end of 2014,and turns to be positve in 2016,the possible reason is that,after four years of liberation of strict regulation “wait-and-see” effect of network news attention gradually reduced.Secondly,there are some differences between media's sentiment effects direction and size on housing price.For local newspapers and policy-oriented newspaper People's Daily,the effect exerting on the housing price is negative.For another policyoriented national newspaper,Xinhua Daily Telegraph,the effect exerting on the housing price was negative in the early period and then positive.For network media,the effect was positive all the time.From the panel data analysis of 35 large and medium-sized city newspapers,it can be seen that after controlling the real estate development investment,land price,credit and other factors,the net bullish sentiment of both the newspaper and the city newspaper has a negative impact on the housing price,and the effect of the party newspaper on the housing price is greater than that of the city newspaper.At the same time,the size of the role is also affected by the city's administrative level and the degree of economic development.Possible explanation is that,for 35 large and medium cities level,market participants is looking forward to more good news when facing with the bullish signals from the party newspaper and city newspaper,thus rendering the developers to lower the price and promote sales.But the effect of national newspapers' bullish sentiment on the country's new commodity housing price is not completely negative.Market-oriented newspapers' net bullish sentiment influce the housing price positively,and is affected by the regulation stage.The transmission effect of net bullish sentiment of online media on housing price was positive from 2010 to 2017,and this positive effect was expanded after the release of tightening regulation in 2014.Thirdly,it can be seen from the empirical studies about the city nespapers and the network media that policy-oriented media's effect are bigger than market-oriented media.The possible reason is that,in China,policy-oriented media are more quliafied in producing content and refecting government intent.Fourthly,it can be found from the comparison of the transmission effects of media attention and net positive emotion between national newspapers and online media on housing price that traditional newspaper media play a smaller and smaller role while online media play a larger and larger role in price variation,which means the transmission speed of media will influence the response speed of housing price to media report.Based on the theoretical and empirical analysis results,this paper puts forward the corresponding policy suggestions: governments at all levels should pay full attention to the expecation guiding role of media and make good use of the expectation management tool of media.All kinds of newspaper media should pay attention to the emotional tendency and release timing of their media reports in combination with the local condition to make them as close as possible to the target of regulation.When producing content,newspaper media should try to make the released information more explicit so as to avoid the misinterpretation of the released information.In non-sub-provincial capital cities,the role of urban newspaper media in the real estate market is not significant,and the government needs to find corresponding media channels to carry out corresponding expectation management.With the change of time,the indicator effect of the emotions transmitted by newspaper media and online media on the housing price shows the phenomenon of " wane and wax".However,the information transmitted by online media is often mixed.The government should not only carry forward the authority and expertise of traditional media,but also make use of online media to avoid the negative influence of online media to carry out expectation management.Governments at all levels should also establish and strengthen measures to consult the land and housing administration departments before publishing important information on the real estate market.Media indicators of the real estate market can be established for market participants to make decisions.