The Research On Influences Of House Price Fluctuation On The Urban Residents Consumption In China

The residents’ insuffic ient consumptio n de mand, high hous ing price are the coreproble ms of our country’s macroeconomic, on how to expand domestic effectivedema nd, curb the rapid increasing of hous ing price have obvious ly become the focusof the governme nt macroeconomic regulatio n and contro l in our country. The rapiddeve lopme nt of the real estate market, making the relations hip of real estate industrywith economic growth a nd macroeconomic stability become more c losed, one of theimportant channe ls is the influe nce of hous ing price to consumption. However,hous ing price rises so obvious ly that make the hous ing price to inco me ratio is high inmany c ities of our country, whic h not only inhib ite the hous ing consumption, but alsoaggravate the bubble of real estate price. The existe nce of real estate bubble will beaggravate the hidden risk to steadily deve lop about the economic, the risk fro m therea l estate sector may be spread to the fina ncia l sector, trigger fina nc ial risk, increasethe bank real estate credit defa ult rates and credit risk. For a long time, mo netaryauthorities and economists has s hown great interesting with price fluctuation of rea lestate, the relations hip about the m has become a research hotspot. So far, most studiesgenera lly found that the hous ing price to residents’ consumption has a significantwealth effect, and the wea lth effect is b igger tha n the rest o f the financ ia l assets suchas stock market. But, there are also ha ve other sounds, they think the hous ing itse lfhas particular characteristics with the dua l nature of cons umption and investment, iftak ing the hous ing cons umption goods attrib ute into account, the wealth effect isuncerta in to pla y. Therefore, studying the impact mecha nis m of price fluctuation tourban residents’ consumptio n, not only to the hea lthy deve lop ment o f the rea l estatemarket, but also to improve the residents’ living standard and coordinating economichealthy developme nt ha ve important theoretical and practical s ignificance.Based on past related literature of price fluctuation on res idents’ consumptio n,we know the results have obvious characteristic of uncerta inty due to the d ifferencesof the research object, se lect sa mples and the method. For causes of the uncertainty,this artic le summarized as the three fo llowing po ints: first, the wealth effect and thecrowding-out effect about the impact of house price on cons umption are influenceeach other and even cance l out, the fina l net e ffect depends on the power of these twoeffects; Second, house price fluctuatio n can time ly liquidation of liq uid ity assets depends on borrowing costs of the d iscretion mortga ge and develop ment of creditmarket, for the deve lopment o f perfect credit ma rket, house price fluctuation oncons umptio n may be more inc lined to the wealth effect, but for imperfectdeve lopme nt of cred it market, the effect are more prone to negative effect; Third, thewealth e ffect channe l and the collatera l channel are not really caused by pricefluctuation, but by other common factors that affect the hous ing price andcons umptio n in the sa me direction, such as income, interest rates and creditconstra ints, which make house price and cons umptio n show certain degree of p ositivecorrelation.Therefore, to study the effect of price fluctuatio n on China urban residents’cons umptio n, it is necessary to take these uncerta inties into account, so that we willbe more accurate ly estimate the rea l impact. Thus we take the following measures:First, adding the e ffect of ho us ing consumptio n into the consumption utility function,cons idering the hous ing consumption attribute; Second, in the process of optimizationto consumer cons umptio n, joining the conditio ns of hous ing funding constraints andmortga ge constra ints, cons idering the housing investment property; Third, adding thecommo n factors influe nc ing the consumption and hous ing price, avo iding the proble mof omitted variable bias.Based on this, unlike the previous literature, this paper not only cons iders thehous ing investme nt property, but a lso takes the ho us ing consumptio n attrib ute intoaccount. we induce hous ing price, housing area, consumptio n habits, borrowingconstra ints, and other re lated variables into the consumption inter-temporal optima lselectio n model, establis he a dyna mic panel model which can test the effect out of thehouse price fluctuation to res idents’ consumption, ana lyzing the multip le effectperspectives of house price impact on urban res idents’ consumptio n in China,discuss ing the effect of price to overall of urban residents’ consumption, and stud yingthe asymmetry impact of house price fluctuations on residents’ consumption, what’smore, we also inspecte the regio na l differences about the house price fluctuation toresidents’ consumptio n, as well as the thresho ld effect about the m.Both cons idering the dua l attributes of hous ing investme nt and consumptio ngoods, this paper constructe a dyna mic pane l model to emp ir ical ana lys is formulti-leve l, the results shown that:(1)China’s urban residents are affected by thestrong consumption habits and income sens itivity.(2)cons ider ing the asymmetriceffect of ho use price fluctuatio n impact on China urban residents’ consumption, theoverall performance is the wealth effect, but shown obvio us asymmetry, house price upward fluctuation b y10%will enab le consumption spend ing increased by0.263%,downward the same percentage will cause consumption corresponding fa ll by0.208%.Obvious ly, the urban residents’ consumption c hanges along with the price ris ingslightly greater than the decline.(3) considering the regio nal d ifferences, the effect ofhouse price fluctuation on urban residents’ consumption is wealth effect in the easternand western regio nal, house price rises per10%, the correspond ing consumption willbe growth of0.729%,0.054%respective ly; by contrast, the impact of house price oncons umptio n shows crowding-out effect in the central regio n, house price rises per10%, the consumption will be drop by0.484%. Obvio us ly, the effect of house pricefluctuation o n China urban res idents’ consumption s hown c lear regiona l d ifferences,the differences not only reflected in the intens io n, but also in the influence direction,and the differences will be changed as the range of house price volatility.(4)cons idering the thresho ld e ffect, the paper puts forward house price influe nc ingcons umptio n exists thresho ld effect, house price ris ing modestly promotes wealthapprec iatio n, boosts consumptio n confide nce; Price ris ing excess ive ly fast bringshuge pressure, causes current consumption to reduce. if ho use price rises less than13.31%, the impact of house price ris ing on consumption is do minated by the wealtheffect, with the increasing of ho use price the effect size shown inverted u-shapedcurve characteristic, the overall wealth effect reaches the maximum on the critica lvalue6.55%, if the margin of house price rising is greater than13.31%, the overalleffect appears crowding out effect with house price ris ing further more obvious effect.