BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 13/2011:
What drives urban consumption in mainland China? The role of property price dynamics
Yu-Fu Chen ()
, Michael Funke and Aaron Mehrotra ()
Abstract: This paper adds to the literature on wealth effects on
consumption by disentangling house price effects on consumption for
mainland China. In a stochastic modelling framework, the riskiness, rate of
increase and persistence of house price movements have different
implications for the consumption/housing ratio. We exploit the geographical
variation in property prices by using a quarterly city-level panel dataset
for the period 1998Q1 – 2009Q4 and rely on a panel error correction model.
Overall, the results suggest a significant long run impact of property
prices on consumption. They also broadly confirm the predictions from the
theoretical model.
Keywords: consumption; house prices; China; panel data; (follow links to similar papers)
JEL-Codes: C23; E21; O53; R31; (follow links to similar papers)
35 pages, June 21, 2011
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
DP1311.pdf 
Download Statistics
Questions (including download problems) about the papers in this series should be directed to Päivi Määttä ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design by Joachim Ekebom
