Research On The Influence Of Housing Price Change On Family Entrepreneurship Decision

In recent years,China's housing prices have risen rapidly,and the real estate industry has maintained a rapid development trend,and its proportion in the national economy is also growing.Housing price fluctuations have become one of the important factors affecting macroeconomic stability.In particular,the huge subordinated debt defaults caused by US housing mortgages in 2008 have caused a financial crisis,which has far-reaching effects on the US and the global economy.The country has not recovered from the trauma of the global financial crisis so far.According to the "2018 China Urban Family Wealth Health Report",the total household assets of urban households in China reached 1.647 million yuan,of which the proportion of real estate in total household assets allocation was as high as 77.7%,much higher than the US 34.6%;and financial assets are also accounts for a relative low part of assets which is only 11.8%.The higher proportion of real estate absorbs the excessive liquidity of the family assets and squeezes the financial asset allocation of the family.Affected by the traditional concept,most of the residents in China invest their wealth in real estate.The real estate constitutes a large proportion of the total assets of the family.In the collateral mortgage,the real estate is the main collateral of the family.When the house price increases,the total assets of the family increase correspondingly,and the value of the housing wealth rises.Therefore,it is of great significance to study whether the house price affects the family entrepreneurial decision-making through the wealth effect and the collateral mortgage effect.In China,many local governments focus on the heating real estate market,regard it as the important industry and trying to stimulate the local economic level by it.But some papers points out that the rising house price would depress the willingness of household entrepreneurship.Thus,in this paper,we find the relationship between housing price and family entrepreneurial decision-making.When the house equity increases,total household wealth increase and relax the credit constraint.House owner can use the housing collateral to get more loans and put a positive impact on the possibility of family participation in entrepreneurial activities.When house prices rise,households have more net wealth of homes and therefore more available funds can use to invest new business.Based on the statements above,we impose three hypothesis: First,housing price change have a positive impact on the households entrepreneurship decision-making.Second,housing price change would affect households entrepreneurship decision-making through collateral effect and the effectis positive.Third,housing price change would affect households entrepreneurship decision-making through wealth effect and the effect is also positive.This paper use the micro-survey data—China Household Finance Survey(CFPS),by using housing equity as explanation variables,we find that rising housing values will have a positive on family entrepreneurial decision-making.That is,when the house equity increases,the possibility of family participation in entrepreneurial activities increases.Considering the price changes differs among different regions,we divide the data into three parts—East,west and middle,and find the same impact.Second,the home value will have a positive impact on family entrepreneurial decision-making through the collateral mortgage effect.When the home equity increases,the likelihood of starting a business with a full owner is significantly higher than that of a control group(partial owner).When house prices rise,households have more net wealth of homes and have a greater probability of becoming entrepreneurs.In China,only those who have full ownership of the house can borrow the house as collateral,and families who have outstanding mortgage cannot obtain loans by using the house as a collateral.Therefore,by comparing the full owners and partial owners,we find that the collateral effect exists.When the value of the house rises,the net wealth of the house is correspondingly increased,which makes it more likely to participate in entrepreneurial activities.Finally,the value of the home will have a positive impact on family entrepreneurship decisions through the wealth effect.That is,when the value of the house rises,the family members can obtain greater earnings from the houses,so they can bear a greater risk of uncertainty.After the increase in family assets,the funds that can be allocated to the entrepreneurial activities increase correspondingly,which add the probability of entrepreneurship.Given the same fluctuations of housing prices in the same region,house owners feel that the total amount of assets have increased,while for tenants,their total assets do not increase,also they may suffer a higher rent.Therefore,this paper compares the difference in entrepreneurial decision between house owners and the tenants.