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Does High-Speed Rail Really Have a Positive Effect on City Consumption? A PSM-DID Approach With China Case

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  • Xinshuo Hou

    (Business School, Xiangtan University, Xiangtan, China)

  • Dongyang Li

    (Business School, Xiangtan University, Xiangtan, China)

  • Jianghuan Peng

    (Business School, Xiangtan University, Xiangtan, China)

Abstract

This paper evaluates the treatment effect of high-speed rail (HSR) operation on city consumption using the dataset of Chinese cities from 2003 to 2019. Firstly, the applicability of observations is discussed; secondly, observations with no appropriate contrast samples are dropped for more precise empirical results. Then, propensity score matching (PSM) is implied to have the database much more balanced and suitable for the difference-in-difference (DID) framework, that is, the PSM-DID approach. The main results find a novel phenomenon of Simpson's paradox regarding the HSR-consumption nexus, which indicates that even though we can observe the positive effect on the whole, the results argue negative relationships between HSR and consumption within subclass cities. In addition, a dose-response assessment (DR) and some other checks have been proposed to demonstrate robust estimation results.

Suggested Citation

  • Xinshuo Hou & Dongyang Li & Jianghuan Peng, 2022. "Does High-Speed Rail Really Have a Positive Effect on City Consumption? A PSM-DID Approach With China Case," Journal of Regional Economics, Anser Press, vol. 1(1), pages 48-67, December.
    • Handle: RePEc:bba:j00009:v:1:y:2022:i:1:p:48-67:d:135
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    References listed on IDEAS

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