China's Real Estate Wealth Effect Study

In the recent years, fluctuations in the stock prices triggered changes in consumer spending has been concerned more extensively than that in the real estate prices by academic circles and governments. There are less analyses combined the wealth effect of the real estate market with that of the stock market. In fact these studies have important significance in both theory studying and social practices.At first, this paper inspectes the studying between the wealth effect in stock market and the wealth effect in real estate market. Then it studies the wealth effect in real estate market by both classic and innovative theory and the transmission mechanism of housing wealth effect. This paper makes use of the ADF Test, the JJ Test, the Granger Test and the ECM model to analyze the wealth effect and analyzes the wealth effect of the real restate and the stock market in China and in three cities of China that includes Beijing, Tianjin and Hangzhou.The empirical research shows that the China's a housing market presence negative wealth effect of the weak stock market and there is wealth effect. This paper provides some suggestion for the real estate market to promote the wealth effect of the real estate market and the economic department of China.On the one hand, this paper studies the wealth effect of the real estate market on the whole country and the region of China; on the other hand, this paper researches the wealth effect of the real estate market with the wealth effect of the stock market. As China's real estate market to improve, the paper's findings further study on the future of China's housing wealth effect.