Theoretical and Empirical Analysis of the Impact of Real Estate Price Fluctuations on Household Consumption - Based on Provincial Panel Data in China

DOI: https://doi.org/10.62517/jse.202411411

Author(s)

Xiao Zheng

Affiliation(s)

State Information Center, Xicheng District, No. 58 Sanlihe Road, Beijing , China

Abstract

This thesis examines the impact of real estate price fluctuations on per capita household consumption in China through theoretical and empirical lenses. Utilizing provincial panel data encompassing 31 provinces, autonomous regions, and municipalities, it is found that increases in real estate prices generally boost per capita household consumption. However, a detailed analysis segmented by income and real estate price levels indicates that in regions with middle and high incomes, rising real estate prices are associated with a decrease in per capita household consumption, with more pronounced effects observed at higher income levels. Similarly, in areas where residential sales prices are at a medium to high level, although the initial price increase often increases per capita consumption, further increases can lead to a significant decline. The thesis also explores the relationship between different types of consumption expenditures and real estate prices, revealing that higher residential prices reduce per capita household expenditures on housing.

Keywords

Real Estate Prices; Household Consumption; Disposable Income

References

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