Abstract
Based on the fixed-effect model, with a five-period unbalanced panel data from China Family Panel Studies (CFPS) in 2010, 2012, 2014, 2016 and 2018, this paper studies the effect and the transmitting channel of housing price on consumption. The results show that the effect of housing prices on the consumption of households is significantly positive and the rise of housing price has a stronger effect on the promotion of basic consumption. Further analysis of the differences shows that house prices mainly affect the consumption of high-income families, young and middle-aged families, families with multiple suites, and households in the eastern and central regions. In addition, the intermediary effect test shows that the impact of house prices on consumption is partially transmitted through property income.
Highlights
Since the housing system reform in 1998, the housing in various provinces and cities in China has gradually stepped into the era of monetization, commercialization and marketization
The results show that the effect of housing prices on the consumption of households is significantly positive and the rise of housing price has a stronger effect on the promotion of basic consumption
In order to study the impact of housing price fluctuations on total household consumption and further study the differential impact of housing prices on consumption at different levels, this paper uses housing prices as the core independent variable on the basis of model (1), and takes total household consumption, basic consumption, and high-level consumption as the core dependent variables respectively, considering the control variables of household micro-features at the same time
Summary
Since the housing system reform in 1998, the housing in various provinces and cities in China has gradually stepped into the era of monetization, commercialization and marketization. Zhang & Sun (2019) used the macro and micro data of 136 prefecture-level cities in China from 2001 to 2012 to observe the impact of housing price fluctuations on residents’ commodity demand from the perspective of tariff transmission They found that in the areas with high housing prices, due to the obstruction of the tariff transmission mechanism, rising housing prices have little effect on consumption, and the transmission effect of tariffs shows differences in different cities. This article selects the unbalanced panel data of five periods from 2010 to 2018 in CFPS It empirically studies the overall effect of house prices on consumption and the effects of different consumption levels. This article makes up for the shortcomings of previous research and has practical significance
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