Economics

Housing prices and household consumption: a threshold effect model analysis in central and western China

H. Zheng, J. Qian, et al.

This study by Huazhu Zheng, Jiao Qian, Guihuan Liu, Yongjiao Wu, Claudio O. Delang, and Hongming He uncovers how housing prices strain household non-housing consumption in central and western China, revealing a fascinating threshold effect influenced by housing credit constraints. As the research suggests, the interplay of unaffordable housing and access to quality public education resources greatly impacts consumption patterns in these regions.

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Abstract

This study investigates the impact of housing prices on household non-housing consumption in central and western China, considering housing credit constraints. Using a panel threshold model and data from 2005 to 2020, the findings reveal a threshold effect of housing credit constraints. In the western region, the elasticity of housing price fluctuation on non-housing consumption remained negative, while in the central region, it changed from negative to positive when credit constraints exceeded the threshold. The study concludes that unaffordable housing prices and home-ownership linked to better public education resources are key factors leading to low non-housing consumption rates in these regions.

Publisher

Humanities & Social Sciences Communications

Published On

Oct 31, 2023

Authors

Huazhu Zheng, Jiao Qian, Guihuan Liu, Yongjiao Wu, Claudio O. Delang, Hongming He

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