Research Of The Crowding-Out Effect Of Indemnificatory Housing Investment On Commercial Investment In China

With the improvement of housing security system in China, the supply of the indemnificatory houses is gradually increasing. However, there are many different opinions in academic circle. Some opponents argue that the indemnificatory housing investment will crowd out the investment of the real estate developers in the commercial houses from the aspects of land, capital, construction cost and demand. On the other hand, supporters believe that due to the lower level of marketization of the interest rate and more plentiful money supply in China, the indemnificatory houses only improve the housing condition of low-income families who do not have affordable capacity, and cannot play a role in separating the demand for houses. The theory on housing filtration demonstrates that the increase in the indemnificatory houses with respects to the low-income families can effectively promote the filtration of the commercial houses, spur the demand for the commercial houses, and have the "crowding-in" effect. In fact, above arguments concentrate on the theoretical analysis, without evidential demonstration. This is the outset of this paper.This paper from the perspectives of theories on "Housing filtration ","Housing investment" and "Keynesian public investment" focuses on the impact of the indemnificatory housing investment on the commercial housing investment, and investigates the relationship between the indemnificatory and the commercial housing investment on the basis of summarization of current researches. We analyze the effect of public housing investment by government on commercial housing investment by the real estate developers by using the adjustment model of housing stock which features commercial housing investment as dependent variable, and verify the35large-and middle-cities’ data by using the methods of the static and dynamic panel data estimation. The estimated results indicate that the static panel data estimation in terms of areas and the dynamic estimation on the average all draw the same conclusions, namely, currently public housing investment in China does not really affect housing construction investment by private sectors, and in the field of social housing security system led by government the behavior of crowding out private investment driven by public investment is not significant. Finally, based on empirical research, we propose the corresponding policy suggestion according to the real fact of current public housing construction.