The Research On Spillover Effect Of Basic Public Services On Real Estate Market

China's economy has grown rapidly,people's life and the level of social development has upgrade significantly since the reform and opening up.Its GDP grew from 364.52 billion to 47288.16 billion.The experience of China's development,as a big country model,is imitated by those countries having analogous endowment.Joshua Cooper Ramo called China's development experience "The Beijing Consensus" in a survey papers in 2004."The Beijing Consensus" has a high reference value on international organizations and developing countries and regions.However,the development of China's economy has arisen many problems.Among the problems,a prominent performance is that the achievements of development can not be shared fairly by people,the income gap among social classes and regions grows more largely,the improvement of people's living standards is not suited with economy development standards.In order to improving people's livelihood,promoting the harmony of society,incarnating fairness and justice and making the achievements of development be shared fairly by people,the Communist Party of China and China's government decide to accelerate the establishment of a basic public service system covering all members of society and achieve the equalization of basic public services gradually.The basic public services,containing compulsory education,basic medical,public infrastructure,ecological environment and public safety and so on,are the important exemplification of urban livability.The urban livability is one of the main factors to attract the influx of labor,which will cause the changes in the number and structure of the urban population,and then affect local economy development and real estate market.According to Tiebout' research,people will tradeoff the public services of community and this will affect local house value.Based on the reference and expansion to Tiebout' classical model of public goods and jurisdictions competition,this paper investigates the relationship between the basic public services and the supply and demand of real estate,study the spillover effect of basic public services on real estate market.This thesis finds the spillover effect of basic public services on real estate market firstly.It also theoretical analyzes and empirical tests the spillover effect.The main conclusion of this article is as follows:Firstly,the basic public services have spillover effect on the quantity of real estate market.The supply and demand of real estate market are important index to measure the situation of real estate market.Theoretical analysis indicates that the basic public services can boost real estate investment by reducing the transaction costs of real estate business and expanding social needs.Empirical test shows that the spillover effect of basic public services on real estate investment exists both in long time and short time.The basic public services can promote household demand on house through income distribution effect and Induced demand effect.Empirical test demonstrates that the basic public services have spillover effect on real estate demand.The further study on the 6000s questionnaires from 30 cities indicates that the basic public services have a positive effect on household tenure choice;besides,hukou also can affect the effect of basic public services on household tenure choice because of China's special Household Registration System.Secondly,the basic public services have spillover effect on the prices of real estate market.The prices of real estate market include real estate sale prices and real estate rent prices.By constructing hedonic model and empirical examining the impact of public services around houses on their sale prices and rent prices,this paper finds that the basic public services have spillover effect on both of housing sale prices and rent prices using nearly ten thousand micro data of Nanjing's eight districts south of Yangtze River,and the educational capital is the key factors to impact housing price and rent among four kinds of public services.The research also tries to explore the reason of the deviate of sale prices to rent prices on the view of the basic public services.Empirical results reveals that government's inadequate input of public services to the fringe of city will raise the ratio of housing price to rentThirdly,the spillover effect of basic public services on the prices of real estate market could be affected by elasticity of land supply and real estate tax.Although the spillover effect of basic public services on the prices of real estate market does exist,it will be affected by some factors.The empirical study manifests that,with the increasing of elasticity of land supply,the capitalization of public services to house prices declines by classifying Nanjing's eight districts south of Yangtze River to urban district,sub-urban district and fringe district according to the elasticity of land supply.Real estate tax is always considered as one of government's most important financial source to provide public services.Through inspecting the relationship among real estate tax,public service and housing prices,the empirical research indicates that real estate possession tax and trading tax is negative correlated with housing prices while the public service is positive correlated with housing prices,furthermore,the positive effect is larger than the negative effect.That is to say the positive spillover effect of basic public services on housing prices is larger than the negative spillover effect of real estate tax on housing prices.On the context of promoting the equalization of basic public services,this paper proposes policy recommendations on the view of household registration system,real estate tax system and the healthy operation of the real estate market based on the empirical research.That is:(1)Constantly promoting the equalization of basic public services among regions to improve people's living conditions and reduce the transaction costs of real estate development enterprises;(2)Reforming and improving the existing household registration system,and progressively cancel the phenomenon of linking the right of enjoying basic public services to hukou;(3)Considering the health of the real estate market and rationally allocating the basic public services in different regions,to avoid a strong impulse on the real estate market;(4)Reforming the existing real estate tax system and levying real estate possession tax,to achieve promoting the equalization of basic public services along with levying real estate tax.The possible innovations of this paper conclude that it both focus on the impact of basic public services on the quantity and price of real estate market with measuring basic public services by three methods and it try to explain the Puzzle of City's Housing Price to Rent Scissors in China on the view of basic public services.The inadequacies of this dissertation is that it can't consider government's expenditure behavior and efficiency of basic public services and didn't analysis the impact of residents' preferences of basic public services on real estate market.