Research on the impact of investor sentiment on the yield of the real estate sector

This study investigates the interaction between investor sentiment and macroeconomic environment in China's real estate sector from 2013 to 2023. Using a dataset combining psychological measurements from 2,156 investors with market data from 148 listed real estate companies, we examine how monetary policy and market structure shape the transmission of emotional effects. Through empirical analysis integrating emotional psychology and behavioral finance theories, we identify three key mechanisms: (1) monetary policy environment significantly moderates emotional transmission in the market, with loose policy periods amplifying sentiment effects; (2) market structure and investor composition determine the strength of emotional contagion, showing stronger effects in retail-dominated markets; (3) social networks and institutional arrangements systematically influence how individual emotions aggregate into market-wide sentiment. Our results demonstrate that the impact of investor emotions varies substantially with macroeconomic conditions and market structure, revealing the crucial role of policy environment and institutional framework in emotional transmission. These findings provide insights for maintaining market stability through coordinated management of monetary policy, market structure, and collective sentiment.