Housing Booms and Shirking

60 Pages Posted: 19 Jun 2018 Last revised: 6 May 2020

See all articles by Quanlin Gu

Quanlin Gu

Peking University

Jia He

Nankai University

Wenlan Qian

National University of Singapore - NUS Business School

Date Written: October 29, 2019

Abstract

This paper studies the incentive costs of housing booms. We use the type and actual time stamps of 9.3 million credit card transactions by over 200,000 cardholders from a large commercial bank to detect non-work-related behavior during work hours. After positive shocks to house prices, employees in the treated cities experienced an immediate and permanent increase (by 8% per month) in their propensity to use work hours to attend to personal needs. The post-shock response is driven by homeowners especially those experiencing a greater increase in housing wealth, while heavily exposed renters exhibited a decrease in work-time distraction. Furthermore, the effect is more pronounced among employees with lower work incentives or for occupations with higher monitoring costs. Our results offer novel insight into the real effect of house price increase through its distortionary effect on work incentive—our estimate implies an elasticity of shirking propensity with respect to house price of 1.6.

Keywords: housing booms, house wealth, incentive cost, shirking, effort, productivity, credit card, household finance, land auction, China

JEL Classification: D12, D14, D91, E21, H31, R3

Suggested Citation

Gu, Quanlin and He, Jia and Qian, Wenlan, Housing Booms and Shirking (October 29, 2019). Available at SSRN: https://ssrn.com/abstract=3189933 or http://dx.doi.org/10.2139/ssrn.3189933

Quanlin Gu

Peking University ( email )

Jia He

Nankai University ( email )

94 Weijin Road
Tianjin, 300071
China

Wenlan Qian (Contact Author)

National University of Singapore - NUS Business School ( email )

15 Kent Ridge Drive
Singapore 117592, 119245
Singapore
(65) 65163015 (Phone)

HOME PAGE: http://sites.google.com/site/wenlanqian/

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