Local Governments’ Housing Market Intervention Tendencies: Measurement And Mechanism

In recent years,the local governments have been awarded more power and responsibility to design different intervention policies on local housing markets.In this context,this paper systematically analyzes the features,determinants and effectiveness of the local government’s intervention tendencies on the housing market,for the purpose of providing a reference on local governments’ reasonable regulation in order to maintain the healthy and stable development of local housing market.This paper firstly investigates the intervention related resources from the policy documents and the third-party database by adopting several methods such as computer learning,text mining and Contingent Valuation Method.And then this paper calculates the housing market intervention tendency indexes with low and high frequency respectively.Qualitative description and comparison on multivariate dimensions of the indexes suggests that the intervention tendencies appear differently in the local governments with different economic development level.Based on the indexes,this paper further theoretically and empirically tests and confirms that the local governments generally follow the requirement of the central government,and will also adjust the policies according to the specific conditions in the local housing market.Incentives such as pursuing land sales revenue will also affect local governments’ tendencies,but the effect is relatively limited.The test of high frequency index further indicates that the local governments appear to be self-interest and subjective to some extent for their preferences on the price-type indicators,the short-term interests and the reporting data.This paper finally tests the effectiveness of the intervention tendencies.Based on the analysis of two typical intervention policies,this paper provides a comprehensive understanding on the tendency-to-conduct delivery process of the intervention policies.The empirical research subsequently demonstrates that the local governments’ intervention tendencies significantly affect the local housing market conditions,and these effects vary in different cities and time dimensions.Based on the above researches,this paper puts forward several policy recommendations.Firstly,the governments should insist the precautionary principles,avoid setting urgent intervention objectives and permit the interventions certain grace period.Secondly,the adequate counseling relationship between the central government and the local governments is necessary,for the purpose of reducing the financial pressure of the local governments.Thirdly,it is important to design flexible evaluation system to meet the local government officials’ promotion demands.These measures may help achieve coordinated,sustained,healthy and orderly development of the national and regional housing market.