Research On Income Distributional Effects Of Housing Price Fluctuation In China

China has achieved sustained rapid economic growth since the economic reform and opening-up starting from1978and the level of income for urban residents has improved significantly since then. The income gap between urban and rural residents or among urban residents has continued to widen because of the unbalanced economic development in different regions, the imperfect mechanism of benefits distribution, and lagging behind in adjustment mechanism of income distribution. China implemented a national wide urban housing reform program in the late of1990s. After then, the urban real estate prices continually climb up to the most recent, obviously in some of core cities in China, for example, Beijing, Shanghai, Guangzhou and among others. The sky-high property prices cause that residents or families in high-income groups are in advantage to receive capital gain from their housing prices increasing.Evidence shows that the income gap of urban residents is gradually widened as almost synchronous with domestic integrity housing prices rising trend in the past decade. On the one hand, residents in the different income groups have a variety purchasing power of homes. The low-income residents are under a higher pressure in housing purchase than high-income families. On the other hand, the increasing value of property impacts the wealthy distribution among residents in different income groups, which makes unbalanced wealthy distribution in China society even worse than before. There is a rapid growth trend which the social wealthy is concentrated to the rich families one-way recently. Therefore, the gap between the high-and the low-income families was getting bigger and bigger.The income distributional effect of housing price fluctuation is defined as the phenomenon that income distribution among the residents caused by the housing prices fluctuation in the current research. The existence of this effect is closely linked to housing prices and income distribution situation, and also highlights the livelihood issues of the housing. As a result, fluctuation in house prices is not only the problem of market itself, but also can has been seen as the comprehensive reflection of existing institutional barriers in the model of economic growth and income distribution methods. At the meantime, China12th Five-year economic development program will turn the target from pursuit of efficiency to a fair distribution of social wealthy among residents, which provides significant policy and practical foundations for the current research. Thus, to explore the performance, transmission mechanism and the main channel of the income distribution effects of housing price fluctuation in China have important theoretical and practical significance, such as promoting reasonable housing prices changes, inhibition of investment and speculative housing demand, supporting user demand, and optimizing the mechanism of income distribution, housing and social fairness.The current study finds that housing prices fluctuation can cause property income and total household wealth change from macro data, the regional inter-provincial data, and family micro survey data, thus it changes the income distribution among the residents. The relationship between the fluctuation of housing prices and distribution of social wealthy is interactive in the long term, but the non-equilibrium relationship in the short term will be gradually near to the long-term equilibrium as a fixed rate. Moreover, the income distribution effects of house prices changes show obvious difference among three areas:two variables move in the same deriction in the western region and eastern region, but opposite deriction in the central region. Household characteristics, for example total household income, household saving rate and household population age structure, are also demonstrated a certain income distribution effects overlooking the income distribution effect of housing prices.In addition, the individual characteristics, such as the individual household registration, age and working conditions, are significantly impacting the income distribution among residents.The current research contributes to the literatures in the following aspects. First, the research integrates two major popular issues, the price and income distribution, into a unified theoretical framework and presents an in-depth analysis. Second, existing literatures on income distributional effects of housing prices fluctuations are scarce, but this paper performs a systematic study on the topics and puts forward some corresponding countermeasures based on the deep study. Third, we empirically prove that changes in the housing prices impact income distribution through the macro-, regional-, and micro-channel. We systematically summarize the conduction mechanism of the income distribution effects of house prices changes in China. Finally, we employ the multi-dimensional empirical analysis, i.e. micro survey data (CGSS), to study income distribution effects of prices changes. At the meantime, we also test differences in household characteristics and individual characteristics may change the income distribution situation among the residents. As an important aside, it should be noted that we calculate urban Gini coefficient of27provinces in1995-2010according to China’s Statistical Yearbook (1996-2011) in the current study. We would like to shed a light for the coming research in future.This research is organized as follows. Chapter one is an introductive chapter, which will introduce the research background and the research importance. Moreover, both research objectives and research design are also included in this chapter. Chapter two systematically reviews literatures in the field. Chapter three is a methodology chapter. It theoretically discusses the income distributional effects of price changes, and then establishes an overlapping generation model to reflect the correlation of house prices and household income. The model is aim to point out that price changes in the property market can affect income distribution among the residents from the macro-channels, regional channels, and micro channels. Chapter four conducts an empirical analysis of the income distribution effects of the three transmission channels by using the annual time series data through the VAR model to test the mutual effect between China’s house prices and income distribution urban residents from a macro-level. Chapter five analyzes comparatively the income distribution effects of house prices changes in central, eastern and western regions of China according to inter-provincial panel data through the establishment of a dynamic panel data model. Chapter six tests microscopic conduction channels on the income distributional effects of housing price employing General Social Survey (CGSS2006) micro-data. The last chapter is a conclusive chapter, which proposes the countermeasures and policy comments.