Do regional house prices converge or diverge in China? |
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Authors: | Guangyu Mao |
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Institution: | School of Economics and Management, Beijing Jiaotong University, Beijing, China |
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Abstract: | This paper aims to test whether the regional house prices are convergent or divergent in China using a monthly panel data set of China’s 70 large and medium-sized cities from July 2005 to December 2010. This issue is closely related to understanding the efficiency of the country-level housing policies made by China’s central government. The test results suggest that the regional house prices in China are generally divergent, and thereby the country-level policies may be inefficient since they do not explicitly take the strong heterogeneity of China’s regional housing markets into consideration. As a consequence, it may be better for China’s central government to further decentralize and devolve its governance toward the housing market to the local governments. |
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Keywords: | convergence house price pair-wise test ripple effect |
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