Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Fan Yu

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Rights Information

© 2016 Shiyu Zhang


This paper studies the price fluctuation from 2010 to 2016 of two major assets in China: real estate and stock. Equity price is found to Granger cause stock price while the reverse relationship is significant but less strong. The paper then studies whether the nature of the correlation depends on the type of city under consideration. This is achieved by grouping 25 cities into four city tiers based on their level of economic developments and conducting a linear causality test on each city tier. Housing price in first tier cities is found to be much more significantly correlated with stock price. Larger and more developed cities tend to have a stronger correlation with stock than smaller and less developed ones. In addition, the paper also studies the impact of the Chinese government’s recent home purchase restriction on the relationship between the two asset classes. However, the results are contradictory and are not consistent with expectation. The lack of significant results could be contributed to the inherent limitation of our data, as well as the complicated and sometimes confusing policy announcement mechanisms in China.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.