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The Estimation and Determinants of the Price Elasticity of Housing Supply: Evidence from China

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  • Songtao Wang
  • Su Han Chan
  • Bohua Xu

Abstract

This paper provides a first look at estimates of the price elasticity of the housing supply in China at both the national and city levels. Using a panel dataset consisting of 35 cities in China from 1998 to 2009, the findings show that the implied national price elasticity of housing supply is between 2.8 and 5.6. The city-level analysis reveals that geographic, economic as well as regulatory factors are significant determinants of the variation in the observed price elasticity of housing supply. The study of a different regulatory and economic environment contributes to the growing literature on supply elasticity and helps explain the seemingly wide variation in supply elasticities observed across cities and countries.

Suggested Citation

  • Songtao Wang & Su Han Chan & Bohua Xu, 2012. "The Estimation and Determinants of the Price Elasticity of Housing Supply: Evidence from China," Journal of Real Estate Research, Taylor & Francis Journals, vol. 34(3), pages 311-344, January.
    • Handle: RePEc:taf:rjerxx:v:34:y:2012:i:3:p:311-344
    DOI: 10.1080/10835547.2012.12091336
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    Cited by:

    1. Hau, Harald & Ouyang, Difei, 2024. "Can real estate booms hurt firms? Evidence on investment substitution," Journal of Urban Economics, Elsevier, vol. 144(C).
    2. Fangzhi Liang & Gary Gang Tian & Zhihua Wei & Aimin Zeng, 2025. "All That Glitters is Not Gold: Examining the Negative Impact of Real Estate Value on Companies' Market Competitiveness," The Journal of Real Estate Finance and Economics, Springer, vol. 71(4), pages 722-766, November.
    3. Zhang, Yu & Miller, Eric J., 2025. "Location choice of residential housing supply: An application of the multiple discrete-continuous extreme value (MDCEV) model," Journal of choice modelling, Elsevier, vol. 54(C).
    4. Chen, Hongyan & Liu, Qingfang & Zheng, Longfei & Zhang, Xuebo, 2025. "Effect of the Housing Provident Fund on urban housing prices in China: A dual perspective of spatial heterogeneity and nonlinear linkages," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 517-532.
    5. Hu, Wenhao & Wang, Lili, 2025. "Building the metropolis: Subway expansion, land use regulation, and welfare," Journal of Housing Economics, Elsevier, vol. 70(C).

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