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Real Estate Market Policy and Household Demand for Housing

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  • Yuan Cheng
  • John K. Dagsvik
  • Xuehui Han

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

  • Yuan Cheng & John K. Dagsvik & Xuehui Han, 2014. "Real Estate Market Policy and Household Demand for Housing," Pacific Economic Review, Wiley Blackwell, vol. 19(2), pages 237-253, May.
    • Handle: RePEc:bla:pacecr:v:19:y:2014:i:2:p:237-253
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    File URL: http://hdl.handle.net/10.1111/1468-0106.12062
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    Cited by:

    1. Izabela Racka, 2021. "Drivers of Subregional Housing Markets in Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(2B), pages 810-834.
    2. Wei-Ling Tsou & Chen-Yi Sun, 2021. "Consumers’ Choice between Real Estate Investment and Consumption: A Case Study in Taiwan," Sustainability, MDPI, vol. 13(21), pages 1-13, October.
    3. Iris Claus & Les Oxley & Jie Chen & Xuehui Han, 2014. "The Evolution Of The Housing Market And Its Socioeconomic Impacts In The Post-Reform People'S Republic Of China: A Survey Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 652-670, September.
    4. Brzezicka, Justyna & Wisniewski, Radoslaw & Figurska, Marta, 2018. "Disequilibrium in the real estate market: Evidence from Poland," Land Use Policy, Elsevier, vol. 78(C), pages 515-531.

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