Structural interactions between administrative and market prices: evidence from asymmetric adjustment in Korea’s dual assessment system

Purpose This study examines how administrative and market price indicators interact in the Korean housing market, focusing on officially assessed housing prices (OHP), officially assessed land prices (OLP) and market transaction prices (MSP). This study aims to identify whether these indicators exhibit distinct adjustment patterns under policy intervention. Design/methodology/approach This study uses a long-run panel data set of apartment complexes from 2006 to 2025. Fixed-effects panel regression models with interaction terms are used to analyze how policy changes affect relationships among price indicators and their adjustment dynamics. Findings The results show that OHP and OLP exhibit distinct adjustment mechanisms and diverge under policy intervention. OHP displays asymmetric adjustment, responding more strongly in upturns than downturns. The divergence between OHP, OLP, and MSP is not easily explained by macroeconomic factors alone, suggesting a role for institutional valuation mechanisms. Research limitations/implications This study is based on a limited sample and does not fully identify causal mechanisms. Future research should incorporate broader data sets and explore transmission channels linking administrative prices and market dynamics. Practical implications The findings suggest that valuation systems may have broader market implications beyond taxation. Policymakers should consider how administrative pricing may be associated with market expectations and price adjustment processes. Social implications The findings suggest that administrative pricing systems may have broader social implications by influencing housing affordability and perceived price stability. If such systems function as reference points, they may affect expectations and behavior across different groups of market participants. Originality/value This study contributes by analyzing the interaction between multiple administrative price indicators and market prices within a unified framework. It highlights the role of institutional valuation systems in shaping observed price dynamics.