The Research On The Consumption Of The Residents Of The Wealth Effect Of The Real Estate Industry

Since the housing system marketization reform in1998in China, the real estateindustry has been developed into the pillar industry of the national economy and one ofthe important sources of the expansion of domestic demand. so as to promote economicgrowth. International experiences shows that, the increase of asset price of houses givesa positive effect on the household consumption. These researches provide goodexamples of the study of the Chinese residential consumption problems, we canfollowing the international research ideas combing with the actual of China could helpmake useful results and suggest relative policies.The research topic of this dissertation is generalized wealth effects of real estateprice rising in China, based on the theory of consumption using the wethods oftheoretical modeling, econometric analysis, statistical analysis and comparative analysisect. This dissertation tries to answer these questions: If has the wealth effect of realestate existed? What is the influence on the consumers living. How do the China’spolicy authorities put forward policy suggestions?This paper has five chapters. Chapter one is introduction, it introdues thebackground, significance, research purpose, research content, research method and theinnovations and short comings of this paper.Chapter two is the literature review, after the introduction of consumption functiontheory, it introduces the research results about wealth effect of the real estate industryboth home and abroad.Chapter three, first analysis the transmission mechanism of the real estate wealtheffect, then makes an empirical test on the influence of housing selling prices changeson urban residential consumption based on the national data and concludes that the riseof housing selling prices will promote consumption.Chapter four makes an empirical research based on WuHan data and concludes thatthe rise of housing selling price will reduce consumption.Chapter five is the conclusion, points out that the wealth effect of real estate hasexisted. However the size and direction of the wealth effect are not same for differentplaces, meanwhile suggests polices for the real estate in China.