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Government Land Regulations and Housing Supply Elasticity in Urban China

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  • Wenbin Huang

Abstract

This paper studies the effects of government land regulations (GLR) on housing supply elasticity in urban China. We first extend the theoretical framework of Saiz (2010), then use land transaction microdata, satellite‐generated data, and the construction of instrumental variables to analyze the marginal effect of GLR, and finally calculate the housing supply elasticity caused by GLR. Our analysis finds that GLR is an important reason for the overall inelasticity of housing supply in 272 Chinese cities, which reduces housing supply elasticity from 1.457 (elastic) to 0.872 (inelastic). Housing supply elasticity caused by GLR has declined the most in first‐tier cities and the eastern regions. The marginal effect of land use regulation is greater than that of land allocation and supply regulations. The initial development level and natural geographic constraint of each city also matter in China's housing supply market.

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  • Wenbin Huang, 2022. "Government Land Regulations and Housing Supply Elasticity in Urban China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(4), pages 122-148, July.
    • Handle: RePEc:bla:chinae:v:30:y:2022:i:4:p:122-148
    DOI: 10.1111/cwe.12430
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    Cited by:

    1. Jian Wang & Shangui Peng & Siqi Yan & Guancheng Guo & Qun Wu, 2023. "Impact of Chinese Local Government‐led Construction Land Supply Strategies on Urban Innovation and its Spatiotemporal Differences," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(5), pages 161-189, September.
    2. Binkai Chen & Ming Lu, 2022. "Guest Editors' Words," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(4), pages 1-3, July.

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