IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v248y2025ics0165176525000564.html
   My bibliography  Save this article

Housing market investability and stock market participation

Author

Listed:
  • Gao, Huasheng
  • Lü, Yiqing
  • Zhao, Bin
  • Zhu, Ning

Abstract

We identify a causal crowding-out effect of housing market investment on stock market participation. Using a large sample of individual stock trading data and exploiting China's policy on restricting households from purchasing houses, we find a significant increase in the stock market participation among affected households compared to others. Our results are driven by the substitution channel between the housing and stock market: (1) the treatment policy indeed reduces households’ investment in housing, (2) the treatment effect is more pronounced with stricter housing purchase restrictions and higher propensity for real property investment, and (3) households’ stock turnover rate decreases.

Suggested Citation

  • Gao, Huasheng & Lü, Yiqing & Zhao, Bin & Zhu, Ning, 2025. "Housing market investability and stock market participation," Economics Letters, Elsevier, vol. 248(C).
    • Handle: RePEc:eee:ecolet:v:248:y:2025:i:c:s0165176525000564
    DOI: 10.1016/j.econlet.2025.112219
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176525000564
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2025.112219?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Stock market participation; Housing market; Household finance; Stock trading;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:248:y:2025:i:c:s0165176525000564. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.