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 data set 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.
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 |
|---|---|
| Pages (from-to) | 383-409 |
| Number of pages | 27 |
| Journal | Pacific Economic Review |
| Volume | 22 |
| Issue number | 3 |
| Early online date | 16 Mar 2016 |
| DOIs | |
| Publication status | Published - 27 Aug 2017 |
