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between the two types of beta is named the behavioural error (BE).
In Chinese stock market, I will focus on the Shenzhen market. CAPM is capital asset pricing model. According to Shefrin and Statman (1994), the CAPM beta will have a noise trader risk component and an efficient beta.
      Equation 1

Where      is the stock i’s return at time t
    is the risk free return for the China government bond at time t
    is the return on the market at time t (Shen zhen Composite Index)
   is the error term
  is the intercept of the regression equation
  is the CAPM beta
There are two types of Chinese’s stock market, A shares and B shares.
A share market:
      Equation 2
Where      is the return on the market at time t (A share market)
  is the CAPM beta for the A share market
      Equation 3

Where      is the return on the market at time t (B share market)
  is the CAPM beta for the B share market

The difference between the beta of CAPM and BAPM is behavioural error. So, the second step is find the BAPM beta. BAPM is behavioural asset pricing model.

BE:
      
With modern finance theory EMH, there should be no behavioural errors. It means that the expected value of any behavioural error should be zero. So the IANM models the random forecast error in Shenzhen stock exchange market is :
Notes page 210

In the Chinese inefficient market, there are three different reactions:
1) under reaction
The information traders trade to reduce the errors, but fail to eliminate the errors. This underreaction can be differentiated into two components: positive underreaction and negative underreaction
2) overreaction
 Overreaction will occur when information traders adopt a contrarian investment strategy and while trading in the “correct” direction, overestimate the magnitude of the errors. The overreaction can be differentiated into two components, positive overreaction and negative overreaction.
3) information pricing error
Information pricing error is defined as a serious type of market error occurs when information traders fail to adopt a CIS and so increase the noise level in the market. This can be differentiated into two types: positive IPE and negative IPE.

This paper’s purpose is to determine whether noise trader exist and influence the Chinese stock market or not and the behavioural finance applied in Chinese stock market. This answer is only focus on financial factors. In fact, https://www.51lunwen.org/there are still other non financial factors in China, such as investors’ reaction of government policy, herd mentality and investors’ confident.

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