Working Paper: NBER ID: w23819
Authors: Carlos Garriga; Aaron Hedlund; Yang Tang; Ping Wang
Abstract: This paper explores the contribution of the structural transformation and urbanization process to China's housing-market boom. Rural to urban migration together with regulated land supplies and developer entry restrictions can raise housing prices. This issue is examined using a multi-sector dynamic general-equilibrium model with migration and housing. Our quantitative findings suggest that this process accounts for about 80 percent of urban housing price changes. This mechanism remains valid in extensions calibrated to the two largest cities with most noticeable housing booms and to several alternative setups. Overall, supply factors and productivity account for most of the housing price growth.
Keywords: No keywords provided
JEL Codes: E20; O41; R21; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| structural transformation (L16) | manufacturing productivity (L23) |
| manufacturing productivity (L23) | income levels (J31) |
| income levels (J31) | housing affordability (R31) |
| regulatory policies (G18) | housing supply (R31) |
| housing supply (R31) | housing prices (R31) |
| migration (F22) | housing demand (R21) |
| housing demand (R21) | housing prices (R31) |