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.
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.
| Original language | English |
|---|---|
| Publisher | University of Dundee |
| Number of pages | 28 |
| Publication status | Published - Jun 2011 |
Publication series
| Name | Dundee Discussion Papers in Economics |
|---|---|
| Publisher | University of Dundee |
| No. | 255 |
| ISSN (Print) | 1473-236X |
Keywords
- Consumption
- house prices
- China
- Panel data
