An Empirical Study On The Relationship Of Real Estate Price’s Rise And Consumption In China

Since the implementation of the reform of the housing system in1998, real estate pricescontinued to rise, the growing size of the real estate industry, at the same time, the consumptionrate of the Chinese residents weakness in the real estate industry as a pillar industry of thenational economy to stimulate domestic demand and promote economic growththe role isextremely important, so we need to figure out the internal relations of the fluctuations in realestate prices and the level of consumption. References of existing research methods and ideas ofWestern scholars, China’s real estate market combined with the actual situation, a combination oftheoretical and empirical methods to explore the internal relations of China’s real estate prices ofconsumer level.Existing domestic price fluctuations intrinsically linked with the level of consumerliterature’s main concern is the impact of price fluctuations on the overall level of consumption inChina and rarely involves the breakdown of study of the different income groups, this article hasthis as the breakthrough point and consumption level of innovation, to explore different incomegroups in China by the impact of price fluctuations. Theoretical part, we elaborate on thetransmission mechanism of the real estate wealth effect; empirical part, according to the data of1999-2011, China’s consumer spending in different income groups, the per capita disposableincome, real estate sales prices, the stock price index, the VAR model to in-depth analysis ofChina’s real estate price fluctuations on the level of consumption of different income groups andindividual fixed effects regression model.The empirical results show that, in the various factors affecting consumer spending,disposable income of this element is the most important; basically no effect on consumerspending of the fast rising housing prices to low-income groups; fast rising housing pricesinhibition of the middle-income groups and high-income groups, consumer spending, real estatewealth effect the overall performance of a negative effect, that real estate prices led to the realestate value and does not promote consumer, but the consumer had a significant "crowding out".