Empirical Research On Impact Of House Price Fluctuations On China Urban Residents’ Consumption

In the dual background of national adjustment of economic growth and nationalhousing sales price rose too fast, the government in order to stabilize the economy,protect the livelihood of the people, has introduced a series of strict regulation policyfor real estate market across the whole country. However, taking into account thecharacteristics of our country economic development shows regional imbalances, thereality of the real estate market in different areas has inconsistent development levels;and taking into account the real estate industry has close contact with nationaleconomy and resident living, it is necessary to analyze the impact of house pricefluctuations on our consumption whether has regional differences, and then providerecommendations for real estate regulation so as to improve the validity of theregulation, to avoid over-regulation.First, this paper makes theoretical analysis about the impact of house pricefluctuations on the consumers from theoretical basis, action channels and influenceeffect. Then, under the framework of the life cycle and permanent income hypothesis(LCH-PIH), and based on the sample of35metropolitans, this paper builds panelcointegration model and error correction model (ECM) for studying the short-termand long-term impact of house price fluctuations on the resident consumption indifferent areas. By studying, we get results as follows: in the long term, the overallimpact of rising house prices on consumption for urban residents was not significantacross our country; but in Eastern, North China, there is a significant positive effect;in Central China, there is a larger negative effect; and in South China, Western,Northeast, price fluctuations do not cause changes in the local consumer. The shortterm, the house prices rise has no relation with short-term consumption.Finally, from national and regional two levels, combining with the actionmechanism of the real estate wealth effect, this paper analyzes the cause of houseprice fluctuations affect resident consumption shows regional characteristics, and thengive corresponding policy recommendations.