What happens to land price when a rural construction land market legally opens in China? A spatiotemporal analysis of Nanhai district from 2010 to 2015

Urban and rural construction land markets in China, the two formerly separated markets, are beginning to be unified in some pilot areas. So far, but little is known about the associated land market development patterns and what factors influence land market price. In order to examine the impact of urban developers' access to legal rural construction land market on land price, we analyzed the spatiotemporal heterogeneity of price trends for the rural-urban land market in Nanhai district, Guangdong Province, between 2010 and 2015. We collected 2285 land transaction data during that span and mapped price contour lines for the rural-urban development land market in the whole district by using spatial interpolation techniques. Four hedonic price models, on rural and urban construction land respectively, were developed to measure the marginal effects of land attributes on price. Results from the analysis suggest that, temporally, the prices of rural-urban development land grew rapidly between 2010 and 2015. Spatially, prices spread along a gradient from east to west, and the prices in North Nanhai district were significantly higher than those in the south. The hedonic models also suggest that land use type, lot size, and various spatial characteristics impact rural and urban land prices. Overall, this research presented here contributes our understanding of the complex nature of establishing a unified land market in China.     

价格洼地、非市场化供给与收入分配效应——基于长沙楼市的研究

近年来全国房价快速上涨,各地房价出现你追我赶现象。但过去几年,长沙房地产市场却较为平稳,房价水平和上涨幅度与其他同等城市相比,均处于低位,呈现出明显的价格洼地特征。价格洼地的形成与长沙大量土地及住房的非市场化供给有很大关系,并在不同市场主体间产生了财富转移及收入分配效应。     

中国商品房价格长期上行的政策性因素分析

本文从政策学的角度,采用实证分析的方法,剖析了1998～2008年中国商品房价格以及相关变量之间的联动走势和政策性成因。文中提出,商品房价格后期的持续走高背离了市场的真实价值,其政策性原因是对土地总量的行政化控制、以及金融稀缺资源向购房市场的倾斜。本文认为,通过实行土地供应量与房价指数联动机制、以及灵活运用货币政策等组合手段,未来中国商品房价格可能呈现高位窄幅震荡、缓慢上升的趋势。     

Evaluating the risk of Chinese housing markets: What we know and what we need to know

Real estate is an important driver of the Chinese economy, which itself is vital for global growth. However, data limitations make it challenging to evaluate competing claims about the state of Chinese housing markets. This paper brings new data and analysis to the study of supply and demand conditions in nearly three dozen major cities. We first document the most accurate measures of land values, construction costs, and overall house prices. We then create and investigate a number of supply and demand metrics to see if price growth reasonably can be interpreted as reflecting local market fundamentals. Key results include the following:

• (1)Real house price growth has been high, averaging 10% per annum since 2006. However, there is substantial heterogeneity across markets, ranging from 2.8% (Jinan) to 19.8% (Beijing). House price growth is driven by rising land values, not by construction costs. Real land values have risen by 14.4% per annum on average. In Beijing, the increase has been by a remarkable 27.5% per year (or by 1036%) since 2004.
• (2)There is variation about the strong positive trend in house price and land value growth. Land values fell by nearly one-third at the beginning of the global financial crisis, but more than fully recovered amidst the 2009–2010 Chinese stimulus. More recent growth has been much more modest, with some markets beginning to decline. Quantities of land sales by local governments to private residential developers have dropped sharply since 2013. The most recent data show transactions volumes down by half or more. This should lead to a reduced supply of new housing units in coming years.
• (3)Market-level analysis of short- and longer-run changes in supply–demand balances finds important variation across markets. In the major East region markets of Beijing, Hangzhou, Shanghai and Shenzhen which have experienced very high rates of real price growth, we estimate that the growth in households demanding housing units has outpaced new construction since the turn of the century. However, there are thirteen large markets, primarily in the interior of the country, in which new housing production has outpaced household growth by at least 30% and another eleven in which it did so by at least 10%. Regression results show that a one standard deviation increase in local market housing inventory is associated with a 0.45 standard deviation lower rate of real house price growth the following year.
• (4)There are no official data on residential vacancy rates in China, but some researchers have reported very high figures (17%+). We develop a new series at the provincial level which yields a much lower vacancy rate on average, but it has been rising—from 5.2% in 2009 to 7.8% in 2014.
• (5)The risk of housing even in markets such as Beijing which show no evidence of oversupply, is best evidenced by price-to-rent ratios. They are well above 50 in the capital city. Poterba's (1984) user cost model suggests these levels can be justified only if owners have sufficiently high expectations of future capital gains. Even a modest one percentage point drop in expected appreciation (or increase in interest rates) would result in a drop in prices of about one-third, absent an offsetting increase in rents.

     

The impacts of distance to CBD on housing prices in Shanghai: a hedonic analysis

It is widely recognized that location is the primary determining factor of housing price. But to what extent the variation of housing price in Shanghai can be explained by the locational factor has not been empirically examined. In this paper, we examine the power of applying the hedonic method to the spatial-statistical analysis of housing prices in Shanghai. The data we use covers all new commercial residential housings sold in Shanghai during July 2004 and June 2006. The main focus in this paper is to examine the effect of geographical distance to city centre on the selling price of residential housings in Shanghai. We also discuss how the price gradient varies at different directions in Shanghai. Finally, we demonstrate the importance of applying quality control on the development of a housing price index. The statistical methodology and empirical results obtained in this paper carry interesting implications for other cities in China as well.     

Examining the impact of high-speed railways on land value and government revenue: Evidence from China

The Beijing-Shanghai high-speed railway operates at 300 km per hour to connect two of the most important Chinese cities within a travel time of 5 h. By exploiting a unique government land sale dataset, this paper investigates the impact of this high-speed railway on land price and then on the local government revenue. We show that the BSH generally increases the land price by about 87%, which amounts to about RMB 99 billion (around USD 14 billion) more in government land sale revenue or helps to cover about 45% of its construction cost. Furthermore, we show the heterogeneity of the impacts of the BSH on the prices of different types of land. Specifically, we find that residential land located within 3 km from a BSH station experiences a price increase of 278%. This effect is weaker for mixed-use land. Our finding shows that high-speed railway itself could serve as a key channel of infrastructure financing and government revenue sources.     

Fundamentals and the volatility of real estate prices in China: A sequential modelling strategy

In a similar way to the stock market, the housing market in China has often been portrayed as highly speculative, giving rise to “bubble” concerns. Over the last decade, residential prices increased every year on average by double digits in Beijing or Shanghai. However many observers and researchers argue that fundamentals of the housing sector, both sector-specific and macroeconomic, may have been the driving force behind housing price volatility. While existing empirical work exclusively relies on the government housing prices which may suffer from the well-documented downward bias, this paper uses original high frequency unit price as well as transaction series for the residential resale housing markets of Beijing and Shanghai between January 2005 and December 2010 to test alternative hypotheses about housing prices volatility.We propose a sequential strategy in five steps integrating several techniques previously developed in a piecemeal and scattered way. First, we construct daily hedonic prices. Second, in order to search for the possible presence of bubbles on such high-frequency data, we propose using recently developed tests of an explosive root as an alternative to the unit root hypothesis. The third step is generated by the necessity of handling microstructure noise present at a daily frequency, thus filtering the raw data to extract a random walk component. The fourth step extracts a slowly changing monthly volatility component from the filtered daily hedonic real estate data. Finally, in so far as the presence of bubbles does not seem to characterize the residential housing market in major Chinese cities, such as Beijing and Shanghai, in a fifth step we show that fundamentals are able to explain slowly changing volatility, as well as transaction volumes in these first‐tier cities.     

Costly Buyer Search in a Differentiated Products Model: An Experimental Study

This study examines whether the content of buyer information and the timing of its dissemination affects seller market power. We construct laboratory markets with differentiated goods and costly buyer search in which sellers simultaneously post prices. The experiment varies the information on price or product characteristics that buyers learn under different timing assumptions (pre‐ and postsearch), generating four information treatments. Theory predicts that price information lowers the equilibrium price, but information about product characteristics increases the equilibrium price. That is, contrary to intuition, the presence of informed buyers may impart a negative externality on other uninformed buyers. Data support the model's negative externality result when sellers face a large number of robot buyers that are programmed to search optimally. Observed prices conform to the model's comparative statics and are broadly consistent with predicted levels. With human buyers, however, excessive search instigates increased price competition, and sellers post prices that are significantly lower than predicted.     

基于VAR模型对商品房价格影响因素的实证分析——以上海市房价为例

选取上海市房价作为研究对象,通过建立VAR模型来分析上海市地价、居民消费价格指数、房屋竣工面积、贷款利率、货币供应量及热钱流入对上海市商品房价格的影响。协整分析表明,各个变量之间具有长期的均衡关系。Granger因果检验表明,上海市商品房价格与地价之间存在双向的Granger因;货币供应量、贷款利率、房屋竣工面积、热钱与上海市商品房价格是单向Granger因;而上海市居民消费价格指数与商品房价格互不为Granger因。     

Did Vasco da Gama matter for European markets?1

This article explores the impact of the ‘Voyages of Discovery’ on European spice markets, asking whether the exploits of Vasco da Gama and others brought European and Asian spice markets closer together. To this end we compare trends in pepper and fine spice prices before and after 1503, the year when da Gama returned from his financially successful second voyage. Other authors have examined trends in nominal spice prices, but this article uses relative spice prices, that is, accounting for inflation. We find that the Voyages of Discovery had a major impact on European spice markets, and provide a simple model of monopoly and oligopoly to decompose the sources of the Cape route's impact on European markets. Finally, we offer some speculations regarding the impact of the Cape route on intra‐European market integration.     

How revolving-door recruitment makes firms stand out in land market: Evidence from China

The fact that firms seek political connections through revolving-door recruitment is widely acknowledged around the world. Using an original database including the information of listed firms' board members and parcel-level land transaction records, this paper documents how revolving-door recruitment makes firms stand out in China's land market. We show that firms with revolving-door recruitment receive special deals in land transactions, which are simultaneously reflected in the quantity and price of land. Specifically, connected firms buy more parcels and larger areas of land in the primary land market. Due to the particularity of industrial land, price discounts are only identified for commercial and residential land, while not for industrial land. Measuring economic activity by night light intensity, we find no evidence that land transaction under the influence of political connections has a negative impact on economic activity on land. Our research advances the understanding that the state-business relationship is an essential factor in resource allocation in an emerging market with government intervention.     

RESIDENTIAL PROPERTY PRICES IN A SUBMARKET OF SOUTH AFRICA: SEPARATING REAL RETURNS FROM ATTRIBUTE GROWTH

The South African residential housing market experienced high growth in the previous decade, in line with international trends. Traditional methods of documenting this trajectory use the average prices of only properties that are sold in given periods and regions. A critical assumption of these approaches is that houses remain homogenous across time and space. This paper constructs a micro‐level hedonic price index to account for changing attributes of heterogenous houses. It illustrates that returns may have been overstated, and that much of the growth recorded in this market is driven by attribute inflation, particularly in the high price segment.     

How connected are Chinese farmers to retail markets? New evidence of price transmission

This paper examines the extent to which Chinese farmers are connected to regional agricultural markets by looking at the intensity of price transmission from retail markets to the farmgate. This intensity is indicative of the extent to which farmers might benefit from improved marketing opportunities and be exposed to price risks. We estimate the elasticity of farmgate prices to retail prices using price data for 170 markets, in 29 out of 33 provinces of China, at the detail of 12 main products and for the five-year period 1996 to 2000. In each province we find strong linkages between retail and farmgate prices with elasticities ranging between 0.6 and 1 and intensifying over time. This suggests that Chinese farmers are generally well connected to retail markets and that this connectivity has strengthened in the period considered, creating not only new opportunities but also new risks. It is also found that linkages are relatively weak in inland provinces, which is a point of concern in view of Chinese policies to create equal opportunities and equitable growth.     

Assessing the price dynamics of onshore and offshore RMB markets: An ITS model approach

This paper investigates how the price dynamics of both onshore and offshore RMB markets are affected by fundamental determinants, market liquidity, global risk aversion and policies by using daily data from August 2010 to February 2016. The interval time series (ITS) modelling is applied to study the RMB price mechanism by capturing prices of the two markets as one self-formed interval data. An interval-based Wald test is constructed to examine the differences between the coefficients and an interval-based Mallows criterion is proposed for choosing appropriate explanatory variables. We find that both the price level and the price differences of onshore and offshore RMB markets are greatly affected by economic fundamentals indicated by different returns on stock indexes and market liquidity indicated by bid-ask prices of offshore market price. In addition, it is suggested that the interest rate spread between China and the US and the global risk appetite do not significantly affect the RMB price for both onshore and offshore markets. Finally, the results imply that “811 reform” of the RMB exchange rate regime does not change the fundamental price dynamics of RMB markets, but significantly changes how economic fundamentals affect the price mechanism of RMB exchange rate.     

Margin,Short Selling,and Lotteries in Experimental Asset Markets

The robustness of bubbles and crashes in markets for assets with finite lives is perplexing. This paper reports the results of experimental asset markets in which participants trade two assets. In some markets, price bubbles form. In these markets, traders pay higher prices for the asset with lottery characteristics (i.e., a claim on a large, unlikely payoff). However, institutional design has a significant impact on deviations in prices from fundamental values, particularly for an asset with lottery characteristics. Price run-ups and crashes are moderated when traders finance purchases of the assets themselves and are allowed to short sell.     

The Biofuel Controversy

Summary  About a decade ago, the main OECD countries decided to promote the use of biofuels so as to reduce greenhouse gases, to contribute to energy self-sufficiency and to create additional demand for agricultural commodities. The introduction of mandatory blending requirements and lavish subsidies spurred fast adoption of this technology. In the course of 2008, the already existing controversy about the effectiveness of this strategy culminated as the resulting upward shift in demand contributed to staggering rises in food prices on world markets. It is uncertain as yet whether this will tone done current ambitions among policy makers to expand biofuel production. The paper shows that high ratios of energy prices to food prices are needed to make biofuel production profitable without the mandatory blending and subsidies. Yet, even if food-based biofuels disappeared, the issue remains that rising high energy prices will promote intensified use worldwide of land for energy crops, requiring huge amounts of mineral fertilizers and putting nature under additional pressure. In policy terms, this defines three major tasks. The first is replacing the current excise taxes on energy carriers by a uniform carbon tax, so as to mitigate greenhouse gas emissions in an efficient manner, the second to prevent price fluctuations on the oil markets from destabilizing food markets, as happened in recent years. Introduction of upper limits on the use of food for biofuel could prove effective here. The third, much wider, task is to make the transition to a partly biomass based energy production possible and sustainable, that is establishing fair distribution of property and user rights over the lands, while safeguarding biodiversity and soil fertility and maintaining adequate labour standards and living conditions, also during periods that these become non-profitable following a drop in energy prices. The authors thank Lia van Wesenbeeck for her comments.     

居住用地供给对上海住房市场的影响——基于动态存量一流量模型的实证研究

文章运用住房市场存量-流量模型,动态分析居住用地供给对新建商品住房供给及住房价格的影响,并据此模拟不同居住用地供给思路下商品住房市场的运行状况。基于上海数据的实证分析发现：政府新增居住用地供给对一定时期后的新建商品住房供给具有显著影响;居住用地供给能够影响远期住房价格,但很难对当期住房价格产生影响。模拟结果显示：增加居住用地供给所能起到平抑房价的作用较为有限。据此提出,政府居住用地供给应着眼于长期,不宜依据短期住房市场状况进行频繁调整。     

Mechanical Refrigeration and the Integration of Perishable Commodity Markets

In this paper, we provide a history of the economic impact of mechanical refrigeration in the United States. We also examine spatial and temporal aspects of market integration. Specifically, we examine seasonal fluctuations in prices and analyze regional integration of markets for butter. We test the null hypothesis of no integration before and after the advent and adoption of refrigerated shipping and warehousing using 31 years of monthly data. We find strong evidence of spatially integrated markets after adoption. Our results indicate that the adoption of mechanical refrigeration brought about a significant dampening of seasonal fluctuations of butter prices and a tightening of spatial price linkages. We conclude that the adoption of mechanical refrigeration had a significant impact on both temporal and spatial butter price relationships.     

Price Common Volatility or Volume Common Volatility? Evidence from Taiwan's Exchange Rate and Stock Markets

This paper investigates the common volatility structure of stock and exchange rate markets of Taiwan. The two markets are often linked together and we are interested in knowing whether price or volume is a good proxy to pursue this issue. We claim that Taiwanese government interventions distort the timing of conventional price volatility clustering in the two markets. The unrestricted trading volumes reveal more information regarding the market than price. We find that common volatility does exist in the stock and exchange markets and this fact is uncovered more easily by using trading volume than by using prices.     

城市轨道交通对周边住宅价格的空间效应研究

以合肥轨道交通1号线为例，使用传统特征价格模型和空间计量模型对比分析轨道交通对周边住宅价格的影响。研究表明合肥市1号线对周边住宅的价格具有显著的增值作用，且住宅价格的空间效应显著。空间滞后模型显示住宅与轨道交通站间距离每增加1 km，住宅价格下降6.09%，低于传统模型的8.6%。这说明住宅价格的空间效应会使学者们高估城市轨道交通对周边住宅价格的增值作用，即加入空间效应影响后的研究结果更加真实、可靠。