This article examines the impact of mainland Chinese buyers in the Hong Kong housing market, using complete transaction records between 2001 and 2017. We find that mainland buyers pay an average price premium of 1.4% compared with locals. The premiums are estimated to be 3.5% for large-sized luxury units and 1.6% for homes in central locations. The mechanisms that underlie the price premiums include a hedging effect, residential sorting, and information barriers, of which the hedging motive has the strongest impact. Mainland buyers’ price premiums rise significantly when the Chinese currency depreciates or China Economic Policy Uncertainty increases. Our study sheds light on the impact and mechanism of the ““China shock” on the global housing markets.

Abstract This article studies competition under information heterogeneity in selection markets and examines the impact of public information regulations aimed at reducing information asymmetries between competing firms. We develop a novel model and introduce new empirical strategies to analyse imperfect competition in markets where firms have heterogeneous information about consumers, vary in cost structures, and offer differentiated products. Using data from the Italian auto insurance market, we find substantial differences in the precision of risk ratings across insurers, and those with less accurate risk-rating algorithms tend to have more efficient cost structures. We assess the equilibrium effects of giving firms equal access to aggregated risk information from a centralized bureau. This policy significantly reduces prices by increasing competition, leading to a 15.7% boost in consumer surplus, almost reaching the efficiency benchmark where firms have full knowledge of consumers’ true risk. Aggregating information through the bureau favours low-risk consumers and reduces average costs by 12 euros per contract through more efficient insurer–insuree matching.