Empirical Study Of The Wealth Effect Of The Changes In Real Estate Prices In Chinese Cities

For a long time, China’s economic growth over-reliance on exports and investment, but lack of domestic consumer demand. According to the Western economic theory, the value of wealth owned by the consumers is an important factor affecting the consume. After China’s real estate market-oriented reforms in1998, China’s real estate industry developed quickly, the real estate assets has become an important part of our household wealth. If the real estate asset price changes will bring a wealth effect or promote growth in consumption become a important research to the development of China’s real estate market, or the promotion of domestic demand to promote economic growth in China. Based on the wealth effect theory and the theory of consumer behavior, through a combination of theoretical analysis and empirical analysis, we first introduced the wealth effect of real estate, and then we use the segmented consumption function to study the phases of the wealth effect changes that China’s real estate price changes brings, in order to find that if the real estate price changes can bring wealth effect which can increase the consume, the results show that:1999to the third quarter of2011, which use the year2008as a dividing point, the wealth effect that China’s real estate price changes brought disappeared after the third quarter of the year2008. Finally, we discussed the reason of the result from the factors that affect China’s real estate market wealth effect and the reason of China’s real estate wealth effect changed.Finally, on the basis of the conclusions, this paper advised that China should ensure a reasonable return of the real estate prices, correctly guide of the functior of the real estate market, develop the housing rental market, regulate the secondary housing market and start the reverse mortgage to promote China’s consumptior growth.