Price discovery between private and public housing markets

Public and private housing markets are usually differentiated in terms of p rice, regulations and policies, but they are not necessarily segmented. Any integration, as opposed to segmentation, between private and public market s implies that the prices of private housing are interrelated with the pric es of public housing determined in the open market. If so, information reve aled in one market will be pertinent for making inferences on prices in the other market. This paper addresses the price discovery or relation between public and private housing in view of Singapore's substantial public housi ng programme that has an actively traded secondary market. Implications for the direction of price causality and upward mobility for households betwee n housing price strata are examined.