IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v57y2021i2p311-321.html
   My bibliography  Save this article

Evaluation of Housing Price Control Policies Based on a Sensitivity Analysis and Nonstationary Markov Chain Simulation: Empirical Evidence from China

Author

Listed:
  • Chang Liu
  • Dongtao Lin
  • Jijia Fan
  • Xiaosu Li
  • Pan Chen

Abstract

This study evaluates housing price control policies in China between 2006 and 2016. A panel regression is employed to diagnose the explicit effects of these policies on housing supply and demand, followed by a nonstationary Markov model and t-copula to assess the policy sensitivity of the real-estate sector and the banking sector. This paper presents two important discoveries. First, total social welfare, represented by the sector fundamentals, is extremely sensitive to even tiny shocks from policy adjustments. Second, the current policies effectively restrain the supply of housing but not housing demand. As a result, the current policies fail to achieve their intended outcome by, on the one hand, driving up housing prices with a declining supply of housing and stable demand and, on the other, harming total social welfare. The empirical economic conditions in China are consistent with our findings.

Suggested Citation

  • Chang Liu & Dongtao Lin & Jijia Fan & Xiaosu Li & Pan Chen, 2021. "Evaluation of Housing Price Control Policies Based on a Sensitivity Analysis and Nonstationary Markov Chain Simulation: Empirical Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(2), pages 311-321, January.
    • Handle: RePEc:mes:emfitr:v:57:y:2021:i:2:p:311-321
    DOI: 10.1080/1540496X.2018.1517644
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1540496X.2018.1517644
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1540496X.2018.1517644?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:57:y:2021:i:2:p:311-321. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.