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The Effects of Reference Pricing on Housing Market: Evidence from Shenzhen China

Author

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  • Philip Arestis
  • Mianshan Lai
  • Jia Hou

Abstract

This paper investigates an unprecedented regulation measure in the housing market, reference pricing, with evidence from Shenzhen China. We use a unique panel dataset, obtained through questionnaires to real estate agents, to document the effects of the policy on the housing market. The hypotheses that trading volume and house price decrease are validated by the data, while the one that turnover time increases is not supported. We discuss potential mechanisms that may explain these effects. Meanwhile, we infer estate-level discount factors that are not public information. Based on these factors, we forecast reference prices for the subsequent year. Overall, this paper fills the gap in the field of reference pricing effects on the housing market. JEL: R31, O18, E64

Suggested Citation

  • Philip Arestis & Mianshan Lai & Jia Hou, 2023. "The Effects of Reference Pricing on Housing Market: Evidence from Shenzhen China," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 70(1), pages 1-27.
    • Handle: RePEc:voj:journl:v:70:y:2023:i:1:p:1-27:id:1734
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    File URL: https://panoeconomicus.org/index.php/jorunal/article/view/1734/759
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    More about this item

    Keywords

    Reference pricing; Housing price; Housing market;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy

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