Are Rising College Premiums Capitalized into House Prices? Evidence from China |
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Authors: | Leilei Shen Tracy M Turner |
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Institution: | 1. Department of Economics, Kansas State University, Manhattan, KS;2. Finance Department, College of Business, Iowa State University, Ames, IA |
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Abstract: | Many areas in China experienced steeply rising house prices beginning in 2003. We test whether a change in local residency requirements may have played a role in driving up house prices in some places by tying access to Chinese universities to local homeownership status in the presence of a rising college premium. We generate a novel dataset that combines China housing market and neighborhood data with household and university admission data. We find evidence of capitalization effects and a sizable increase in the likelihood of homeownership postpolicy change in places with the greatest preferential access to China's elite universities. |
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