A Study On How Housing Price Affect Consumption Among Chinese Lurban Residents

This study of the real estate industry is related to the whole citizens' livelihood.The real estate itself has both consumer goods and investment's properties.The impact on the consumption of the family also has two reverse directions.To deeply research how housing price do effect on consumption,this paper uses the China Household Income Survey(CHIP)of 2002,2007 and 2013 to analyze the effect of housing price on consumption in the micro-level.Then we creatively construct an instrumental variable of "whether to impose property taxes" which is a binary variable to study furthermore.To further explore the heterogeneity of the effect of house prices on different types of household consumption,we use the classification data of family property types in the survey sample.The empirical results show that the rise in house price will significantly promote the growth of household consumption in urban households.But this positive effect is not strong that the house price increasing by 10%results in urban residents' household consumption increasing by about 1%.In addition,the heterogeneity study found that the non-housing consumption of the rental family is not sensitive to the house price fluctuation.And the assumption that the rental families have motivation to save for buying house is not true.Urban households' consumption behaviors also have different sensitivity to fluctuations in house price with different number of real estate.The empirical results show that the rise of housing price promotes the overall consumption of urban households who own a house.However,the rise of housing price has no effect on the overall consumption of urban households who rent a house.For households which have one suit of house,the effect of housing price on consumption is significantly positive;for households which have two or more houses,the effect of housing price on consumption is much more positive.At the same time,this article also found that the greater the uncertainty of income,the less the consumption of urban households which indicates that China's urban families have a strong sense of risk prevention.The promotion effect can't fully play out.