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Effect of Aging on Urban Land Prices in China

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  • Sun, Tianyu
  • Chand, Satish
  • Sharpe, Keiran

Abstract

This paper investigates the effect of demographic changes on land prices in urban China using an Overlapping Generation (OLG) model. The model suggests that the rapid rise in land prices could be explained by the rise in per capita income and demographic changes. This finding is validated by fitting the historical data of China. We then simulate land price dynamics for China from 2000 to 2100. The simulation indicates that the rate of rising in land prices is softening. From 2035 to 2055, the effect of demographic changes on urban land prices in China will be close to zero. After 2055, the effect will turn to negative until the end of this century; however, a meltdown is unlikely.

Suggested Citation

  • Sun, Tianyu & Chand, Satish & Sharpe, Keiran, 2018. "Effect of Aging on Urban Land Prices in China," MPRA Paper 89237, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:89237
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    References listed on IDEAS

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    More about this item

    Keywords

    Aging Population; OLG Model; Urban Land Prices; Forecast;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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