The Influence Mechanism Of Residents’ Income On The Local Housing Wealth Effect

The housing wealth is the major asset for most families. In the rising period of housing price, households think about how to use added housing wealth to improve the quality of life, and the government may consider how to promote local wealth of real estate to stimulate consumption. However, researches on the transmission channels and influencing factors of local housing wealth effect are relatively short, with only a few literatures. In order to better grasp the law of local wealth effect of real estate, this paper discusses the problem by using specification and empirical study from the local income perspective.This paper discusses the researches on housing wealth effect at home and aboard, summarizes the transmission channels between family housing wealth effect and local wealth effect, proposes assumption of two channels in local wealth effect which refers to precautionary saving effect and wealth distribution effect, and thus indicates the research hypothesis that residents’ income have influence on local housing wealth effect.Under that, this paper uses life cycle consumption model and threshold regression method to do empirical analysis with the support of22provinces’ panel data from2001to2009. The results of empirical analysis support the assumption and also validate the hypothesis, namely:under the low income level, the increase of residents’ income can stimulates the local housing wealth effect; under the low level of growth rate, the increase of residents’ income growth rate can stimulates the local housing wealth effect; under the high level of income difference, the increase of local income difference can stimulates the local housing wealth effect. We think this paper has a certain academic value:it combines the researches of housing wealth effect at home and abroad, establishes the framework analyzing the impact of residents’ income on the local housing wealth effect, builds life cycle model and threshold regression model, calculates local Gini coefficient, and concludes the way of residents’ income influencing the local real housing wealth effect. The results of this paper provide value for the decision-making departments of government.