How does education affect the formation of a housing bubble in Hong Kong?

The focus of this dissertation is to find the impact of education on the formation of housing bubbles and it attempts to shed some light on finding the solutions to housing bubbles in Hong Kong (HK). Bust of housing bubbles could bring a lot of serious consequences which may include the financial crises occurred in Asia in 1997 and the global financial crises started in 2008 in the United States. This paper examines how the two streams namely the neoclassical and behavioral economics theories have impacted on housing prices and housing bubbles through human behavior and education. Then hypotheses are set up to test the relationships among the variables including behavioral biases, housing prices, bubbles and education. Various techniques including regressions are used to test the hypotheses. While a survey with questionnaire is used as a major analytical tool, officially published housing data of Hong Kong and the world are also used in the analyses. Based on both macroeconomic data and questionnaire survey, this research has concluded that although differences in education may not be directly associated with a certain set of biases in human behaviors such as herd behavior, unrealistic expectations and speculative motivations, they do affect people's evaluation and identification of housing bubbles. Specifically, over-confidence as a standard human bias might have helped form the housing bubbles in HK. However, this research does not find that education is a significant factor in causing behavioral biases. Since this research has shown that people of higher education may have the higher ability to evaluate the current high housing prices and identify the possible existence of a housing bubble, education is suggested to be addressed on the agenda.