Abstract
Based on the discussion about transmission mechanism of local public expenditure on housing price under different housing market types, the paper performs an empirical study on the influence of various public expenditures on housing price by using Chinese panel data of provinces from 2007 to 2015. According to the result, public education expenditure and public transportation expenditure have prominent capitalization effect on housing price. Among the expansions of various local public expenditures, public education expenditure is the most effective type to promote the capitalization of commercial housing. In dynamic panel test, the capitalization effect of public expenditure maintains significant after the introduction of consumer expectation, which is consistent with the regression result of static panel. At last, the paper puts forward some relevant policy suggestions for the government to optimize the structure of public expenditure, guide consumer expectations reasonably and promote the sound development of real estate market.
Highlights
In recent years, the sharp rise of housing price has caused widespread concern in society
Among the expansions of various local public expenditures, public education expenditure is the most effective type to promote the capitalization of commercial housing
Consumer expectation is introduced into the dynamic panel model so as to verify that whether the current real estate market in our country is the investment market oriented by market expectation, as well as to test that whether the impact of public expenditure on housing price is consistent with the results of static panel
Summary
The sharp rise of housing price has caused widespread concern in society. Consumer expectation is introduced into the dynamic panel model so as to verify that whether the current real estate market in our country is the investment market oriented by market expectation, as well as to test that whether the impact of public expenditure on housing price is consistent with the results of static panel. Based on the results of empirical study, the paper will provide reasonable policy suggestions for local governments to adjust the proportion and structure of public expenditure and promote the sound development of real estate market
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