Research on the Externality of the Real Estate Market in Social Security Sector

Due to the existence of the externality, it is difficult to develop the real estate market in social security sector. Therefore, there is a need to study the externality of the real estate market in social security sector. We used the Cobb-Douglas production function for reference to establish the model. We get conclusion that, because the price that people want to pay is less than social optimum price, the quantity (or the quality) of real estate bought by people has to be less than social optimum quantity (or quality). Due to that the quantity (or the quality) of real estate bought by people decreases, the quantity (or the quality) of real estate provided by real estate developer must decrease.