Publication Type
Working Paper
Version
publishedVersion
Publication Date
3-2015
Abstract
The Chinese government imposed the purchase restriction policy to rein in the housing bubble in 2010. Using a two-stage difference-in-difference approach and a comprehensive dataset covering the real estate markets across 70 cities, we find that the policy triggered substantial decline in the property price and transaction volume. Cities having higher reliance on real estate sector for fiscal revenue and economic growth experienced greater decline in housing prices following the policy implementation. However, the policy had no measurable effects on the nationwide construction boom, hinting the ineffectiveness of the policy to correct the housing bubble.
Keywords
Housing purchase restriction policy, housing bubble, China, difference in difference
Discipline
Asian Studies | Finance | Real Estate
Research Areas
Finance
First Page
1
Last Page
46
Identifier
10.2139/ssrn.2584275
Publisher
SSRN
Citation
CAO, Jerry X.; HUANG, Bihong; and LAI, Rose Neng.
On the effectiveness of housing purchase restriction policy in China: A difference in difference approach. (2015). 1-46.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6451
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.2139/ssrn.2584275