Empirical Research Based On The Price Elasticity Of Demand Of China's Real Estate Market Bubble

Real estate is a significant pillar of the national economic system, The industry has an important status in the development of China. The appropriate and stable development of real estate can support and promote the high-speed operation of the entire national economy. In human history, we all remember the brought damage to the whole world economy by real estate, especially the recent U.S. sub-loan crisis. I deeply appreciate that real estate bubbles are high-risk, but which bubble will have a devastating on economic development? What is the process of the bubble formation? How can we test the bubble? If the bubble is dangerous, how can we control it? We need to deal with it as soon as possible.In the paper, I have to collect and learn the relevant bubble theory. We will create a new bubble test model of the price elasticity of demand theory. We evaluate the real estate market in China during 2000-2006, whether it had a bubble or not and deeply analyze various stages of the bubble during different periods. Finally, we will provide rational proposals for the results of the analysis. This paper is divided into four parts:In the paper, I have to absorb and learn the relevant bubble of the theory which from abroad, We create a new Bubble test model in the price elasticity of demand theory, We evaluate that real estate market in China 2000-2006 haven the bubble or no, and deeply analysis various stages of the bubble in different periods. Finally, we will provide rationalization proposals for the results of the analysis.This paper is divided into four parts:Chapter 1 .The chapter provides a brief introduction about the current development of China's real estate industry. We learn the main view from different groups and come to the complex and diverse reasons for the real estate bubble. Investment goods and general merchandise under the two types of analysis points of view to put forward a new idea of the bubble test method that innovative: Price demand elasticity of the real estate market bubble test model. We proposed important new test methods for the domestic real estate bubble. Chapter 2.The chapter focuses on the real estate bubble theory of testing for the new theoretical model. After we review the classical Diamond theory of the bubble, put forward the innovative process of sub-bubble bubble formation and new ideas bubble test. Finally, the real estate market price elasticity of demand model and integration model theoretically verify that the price elasticity of demand and the real estate bubble are mutually related, thus demonstrating that the price demand elasticity bubble testing method is correct and rational.Chapter 3.Empirical analysis conducted in this chapter is to establish in the second chapter the price elasticity theory of demand. Firstly, analysis of China's real estate operating characteristics throughout the 2000-2006 period. Secondly, test whether the new measurement model is correct or not. Thirdly, we test the period of the real estate bubble. Finally, we will record the results of our detailed analysis of the 2000-2006 real estate bubble, as well as the various stages in the bubble.Chapter 4.The chapter combined with the previous chapter's theory of the real estate market price elasticity of demand test on China's real estate early warning rational mechanism to predict the future. It is recommended to use a reasonable understanding and correct way of dealing with these ideas. The main idea is that during different stages of the bubble, the government should use administrative means to carry out reasonable adjustments. We should take advantage of benign and rational bubbles for the rapid development of the market economy and provide a favorable support. But if the financial bubble is harmful to the economy, administrators should manage and control for the market economy's health and stable development.