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Car restriction policies and housing markets

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  • Lyu, Xueying

Abstract

This paper investigates the differential impacts of a unique car restriction policy – the car purchase lottery in Beijing – on the housing markets across locations within the city. I use a difference-in-differences approach to compare heterogeneous neighborhoods before and after the implementation of the policy. Housing prices experience a relative increase at locations closer to common destinations (employment centers: 0.7% per kilometer; primary schools: 3.3% per kilometer) and with better access to public transit (subways: 1.2% per kilometer; buses: 0.08% per line). These changes reflect capitalization of the car restriction policy and imply a large wealth redistribution as large as 6 years of average disposable income across homeowners. The results are relevant to policy, both in the context of unintended consequences and for efforts to develop offsetting measures.

Suggested Citation

  • Lyu, Xueying, 2022. "Car restriction policies and housing markets," Journal of Development Economics, Elsevier, vol. 156(C).
    • Handle: RePEc:eee:deveco:v:156:y:2022:i:c:s0304387822000268
    DOI: 10.1016/j.jdeveco.2022.102850
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    More about this item

    Keywords

    Car restriction policies; Housing prices; Capitalization; Wealth redistribution;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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