Analysis Of The Effects Of Public Investments On Urban Housing Price Spatial Structure

Since Chinese economic reform in 1978, the urbanization in China has been accelerated, stimulating the development of the real estate market. This development raised housing prices in many cities. In the process, the spatial structure of housing prices in cities appeared a divergence mode, from monocentric structures to multicentric ones.Public investment plays an important role in the spatial structure evolution of housing prices, which led to many attentions of researches in urban economics, regional economics, spatial economics and economic geography, and other related subjects. The literatures keep more eyes on the empirical analysis, lack of theoretical framework about the functions and efficiencies of public investment. Though it is an intensified used framework to analyze the spatial structure of cities'housing prices, the classic monocentric model has many limits.From the gap of the theory and the reality, the paper extends the monoentric model by bringing the government investment into it. The model of the paper dividends the government investment into two types, one improving the utility of residents directly and the other reducing the transportation cost, to study the evolution of spatial structure of housing prices. This paper has five chapters. Chapter 1 is introduction, chapter 2 is literature reviews, chapter 3 sets up the model of public investment, chapter 4 discusses the extensions of this model, and chapter 5 is conclusions and policy imprecation. Main conclusions are as follows:First, the investment in transportation promotes the evolution of housing prices spatial structure from monocentric ones to multicentric ones. The more the size of the investment, the farther the optimal location of it from CBD.Second, the investment directly improving the utility of residents has important effects on the housing price gradients, but can not change the monocentric structure of housing prices. The ptimal investment is always located in CBD, thus the optimal investment strengthens the monocentric characteristics.Third, the choice between the two types of investments based on the efficiency of the investments, the elasticity of the public goods on utility and the size of investment.Forth, investments of both types have a interaction effects on housing prices. The optimal allocation between the two types of investments is affected by the size of the total investment.