A Study On The Space Conduction Effect Of Housing Price In China

The real estate industry plays an important role in the growth of the national economy and the residents’ wealth. Its development is strongly influenced by macroeconomic environment, policies and regulations as well as the land market. Having a comprehensive and rational analysis of the ripple effects will contribute to a better understanding of the overall trend of China’s real estate market prices, and provide a theoretical basis for the government’s macro-control polices.By using methods including the unit root test, cointegration test, Granger causality test, impulse response function analysis and variance decomposition analysis, this paper investigates the ripple effects in three levels:between regions, within the region and within the city.The empirical results suggest that the ripple effects between housing prices are prevalent in our country though they may have different patterns in different regions. In the aspect of the ripple effects between regions, it is from Shenzhen to Beijing and Beijing to Shanghai; in the aspect of within the region, it is from the central city to the surrounding cities and meanwhile a two-way effect between cities of equal importance; in the aspect of a single city, taking Shanghai as an example, the ripple effects are rather complicated due to the shorter distance between each district. Besides, unlike the regional level’s ripple effects, it is from the suburb area to the urban area.At the end of this paper, it gives some suggestions about macro-control polices from the view of the ripple effects, and proposes some recommendations for further research.