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Does Housing Cost Affect Birth Rates in Taiwan? The ADL Test for Threshold Co-integration

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  • Wen-Yi Chen

    () (Department of Senior Citizen Service Management, National Taichung University of Science and Technology, Taichung, Taiwan.)

Abstract

This study applied the ADL threshold co-integration model to investigate the relationship between fertility and housing cost in Taiwan. Our empirical results were in favor of the threshold co-integration relationship between crude birth rate and cost of childbearing, such as housing cost and opportunity cost. The asymmetric adjustment process of fertility toward the long-run equilibrium was verified. In general, the effects of housing cost and opportunity cost on fertility in the regime of upper threshold were more significant than that in the regime of lower threshold. Recognizing that housing cost is a major cost of childbearing in terms of family formation, the housing price policy should not be managed from the perspective of the equity of housing affordability but from the perspective of how to maintain the social security.

Suggested Citation

  • Wen-Yi Chen, 2013. "Does Housing Cost Affect Birth Rates in Taiwan? The ADL Test for Threshold Co-integration," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 90-103, October.
  • Handle: RePEc:rjr:romjef:v::y:2013:i:3:p:90-103
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    References listed on IDEAS

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    1. Dettling, Lisa J. & Kearney, Melissa S., 2014. "House prices and birth rates: The impact of the real estate market on the decision to have a baby," Journal of Public Economics, Elsevier, vol. 110(C), pages 82-100.
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    Cited by:

    1. Tsung Huang & Tsun-Feng Chiang & Jiun-Nan Pan, 2015. "Fertility and Crime: Evidence from Spatial Analysis of Taiwan," Journal of Family and Economic Issues, Springer, vol. 36(3), pages 319-327, September.

    More about this item

    Keywords

    ADL test; threshold co-integration; house price; low fertility;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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