Real Estate Price Changes On Consumption Of Urban Residents

Since 1980s, the change of asset prices, such as that of stocks and houses, plays a larger and larger role in the influence of the state's macro economy and consumption under market economy, and draws much attention of the economists all over the world. Along with the housing system marketization reform in 1998 in China, the real estate industry has become the pillar industry of the national economy, and one of the important sources to expend domestic demand so as to promote economic growth. Meanwhile, the consumption rate of the Chinese residents tends to decrease year by year recently. International experiences show that the increase of property price in some countries as Britain and the United States have increased the consumption rate in different degrees. Many foreign researches show that the increase of asset price of houses gives an independent and positive push to the household consumption, excluding the influence of income on consumption, that is, the wealth effect of the real estate industry increases household consumption. Foreign studies on house price and consumption relations have achieved successful results, from theoretical analysis at the beginning to empirical test and prediction, from the analysis of one country to the comparison of countries with different financial systems, from the study of single consumer populations to the populations with various ages. These researches provide good examples for the study of Chinese residential consumption problems, following the international study and combining with the actual of China could help make useful results and suggest relative policies.Domestic studies of houses asset price and household consumption just concentrate on the influence of price changes on the total consumers, there is still a long way to go. This is also the purpose of the study. What is the influence of Chinese financial system on the wealth effect of real estate industry? What is the influence of house price changes on consumers living in different areas and having different income? Whether the house lease price changes could exert its function as property income to promote household consumption? With the development of aging society, what is the influence of house price changes on the consumption of aged population? Discussing and analyzing these problems from theoretical and empirical aspects have theoretical and practical significance, and forms the leading clue of this paper.The contribution of this paper includes both theoretical and empirical study. First, in the study of wealth effect of the real estate industry, it first analyses the influence of different financial systems on wealth effect of the real estate industry, then combining with the actual of China, it theoretically predicts how large the wealth effect of the real estate industry in China is. Second, it discusses the relationship between people with different ages and the wealth effect of the real estate industry, and describes how to use the wealth effect of the real estate industry to promote household consumption in aging society.The two points above are theoretical innovations, this paper contributes three points in empirical aspect. First, on the basis of the influence of national house selling price on household consumption, it selects typical areas to make comparative analysis and studies the wealth effect of the real estate industry in different areas. Then, according to those income and consumption data grouped by income level, it studies the influence of the house selling price changes on the population with different income level using panel data analysis method. At last, on the study of property income of urban residents at present, it analyses the influence of national house selling price changes and regional house selling price changes on urban residential consumption.This paper has seven chapters. Chapter One is introduction, it introduces the background, significance, research method, paper structure and the innovations and shortcomings of this paper.Chapter Two is the literature review, after the introduction of consumption function theory, it describes the consumption function this paper chooses; Then it introduces the research results about wealth effect of the real estate industry both home and abroad. Chapter Three analyses the influence of financial system on wealth effect of the real estate industry. After the comparative study of housing financial market and financial innovations of asset securitization, it points out that, with the introduction and development of asset securitization, market - based financial system could better promote to exert the function of wealth effect of the real estate industry than the bank -based financial system. And now, China belongs to the typical bank - based financial system, which must has obviously limited the wealth effect of the real estate industryChapter Four makes an empirical test on the influence of house selling price changes on urban residential consumption. Using annual data and quarterly data respectively to make regression analysis and cointegration examination on the household consumption in the country and in the typical areas, and concludes that house selling price changes at present has no significant influence on urban residential consumption in China (excluding some cities). The panel data analysis on different income level also gets the same conclusion.Chapter Five makes an empirical test on the influence of house lease price changes in China on urban residential consumption. Both annual data study and quarterly data study show that house lease price changes have significant influence on urban residential consumption.Chapter Six analyses the influence of population age and population structure on the wealth effect of the real estate industry. After introducing empirical study abroad, it concludes that the aged house owner are more sensitive to house price changes, and points out that China should fully exert the function of wealth effect of the real estate industry, implement housing reverse mortgage loan pilots, innovate pension model and promote residential consumption rate.The last chapter is the conclusion. Both financial system and population factor have significant influence on wealth effect of the real estate industry, it is urgent to accelerate financial system market marketization reform and asset securitization pilot to create conditions for exerting the function of wealth effect of the real estate industry, and open up a new way for promoting residential consumption rate in China.