Real Estate Market Policy and Household Demand for Housing

17 Pages Posted: 29 Apr 2014

See all articles by Yuan Cheng

Yuan Cheng

Fudan University - School of Social Development and Public Policy

John K. Dagsvik

Statistics Norway

Xuehui Han

Date Written: May 2014

Abstract

This paper used an estimated mixed multinomial logit model of household housing demand to examine the impact of four housing market‐related policies on a stated preference survey sample. The estimated demand probability function suggested that household choice behaviour does show huge heterogeneity. The estimated results were then employed to examine the effects of the policies. We estimated the potential disequilibrium between demand and supply under the construction‐size‐limitation policy, demonstrated that the efficient movers' subsidy increases along with the household income, and simulated the changes in housing demand when tax policy is changed. We demonstrate the potential usefulness of our modelling framework in assisting policy‐making decisions. Our model also partially explains the failures and controversies of the latest real‐estate intervention policies in China.

Suggested Citation

Cheng, Yuan and Dagsvik, John K. and Han, Xuehui, Real Estate Market Policy and Household Demand for Housing (May 2014). Pacific Economic Review, Vol. 19, Issue 2, pp. 237-253, 2014, Available at SSRN: https://ssrn.com/abstract=2430538 or http://dx.doi.org/10.1111/1468-0106.12062

Yuan Cheng

Fudan University - School of Social Development and Public Policy ( email )

Handan Road 220#
Shanghai, 200433
China
021- 65650777 (Phone)

John K. Dagsvik

Statistics Norway ( email )

N-0033 Oslo
Norway
22 86 48 71 (Phone)

No contact information is available for Xuehui Han

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