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The Role of Housing-Dominated Attributes in Housing Booms: Evidence from China

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  • Philip Arestis
  • Mianshan Lai

Abstract

This paper investigates the dominant attribute of housing in China for the period 2000 to 2017 with national monthly data. By employing VAR methodology and Chow test, the empirical results suggest that there is a statistically significant structural breakpoint in February 2009, and that the housing boom before 2009 was driven by self-occupation consumption demand while the rise in house prices since 2009 is a monetary phenomenon. These are consistent with the institutional backgrounds, when the first period encountered the end of housing as a welfare and rapid urbanization and the second period experienced the expansionary monetary policy introduced at the end of 2008. This implies that housing is gradually evolving from a necessity to a financial item, and policymakers should adopt policies that address the dominant attributes of housing at different periods. JEL: B41, C13, C22, R21, R29.

Suggested Citation

  • Philip Arestis & Mianshan Lai, 2024. "The Role of Housing-Dominated Attributes in Housing Booms: Evidence from China," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 71(1), pages 1-24.
    • Handle: RePEc:voj:journl:v:71:y:2024:i:1:p:1-24:id:1941
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    File URL: https://www.panoeconomicus.org/index.php/jorunal/article/view/1941/810
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    Keywords

    Housing attribute ; Money supply ; Housing prices ; Structural breakpoint analysis;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R29 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other

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