Analysis Of Income Distributional Effects Of Housing Price Fluctuation Based On The Economic Ethic Perspective

Since the real estate market reforms from the allocation of housing to monetarydistribution in1998, China’s real estate industry has been developing rapidly, and thereal estate industry has become a pillar industry. As the economy level improves, thelevel of personal disposable incomes increases and the tax and fiscal policy tilts, thereal estate prices continue to rise. Bureau of Statistics data show that in2013theaverage price of housing in Shanghai reached28,672yuan per square meter. The highprices increase the pressure of the homeowner in the mortgage repayment, and makepeople more difficult to buy a house. In recent years, the government has frequentlyenacted various real estate control policies, but the prices keep increasing, and theprices in some areas fluctuate repeatedly. At the same time, China’s Gini coefficientalmost keeps synchronous growth with the real estate prices, while the part of thenational income distribution tilts to the high-income class. The real estate is animportant property of the family, and the income which it brings to the family is animportant source of the household income. Fluctuations in real estate prices makeshomeowners richer and people without a house poorer. So the property inequalitydeepens constantly.According to the data of the Chinese Bureau of Statistics and the statisticalyearbooks of provinces, this paper conducts empirical analysis by the panel data of30provinces in2002-2011, and selects the income gap as a proxy for income inequality,and then studies the impact of real estate price fluctuations on the income inequality,and then builds Fixed Effect and Random Effect models for empirical analysis. It isfound that the income distribution effects of the fluctuation in real estate pricesenlarges the income gap of our country, and the income distribution tilts tohigh-income groups. The income gap can be narrowed by increasing of governmentexpenditure and improving of opening level, but the expenditure on social securityand employment forms a "reverse adjustment", which is related to the institutionaldevelopment of China’s social security system. Income distribution is not just aneconomic issue, but also a complex Social ethics issue. It is not enough to analyzethe current income distribution just from the perspective of economic efficiency.Sowe should use the standard of the economic ethics to make the right judgments on thecurrent pattern of income distribution, and improve the income distribution in Chinaconstantly. The unequal distribution condition of income exists in China’s current real estate market, which goes against the principle of economic ethics, such as justice,righteousness as important as profit, social responsibility. Based on the results, theauthor put forward policy recommendations on the real estate price fluctuations,reducing income distribution gap, and income distribution effects of pricefluctuation.As the speculative demand is an important factor to promote the realestate price fluctuations, the government at all levels should actively adopt fiscal andcredit policies, such as property tax, etc., to curb speculative demand and protectconsumer need of residents. At the same time, indemnificatory housingconstruction should be enlarged, especially affordable housing and low-rent housing,to protect the basic life rights of low-income groups, and make their income levelsimproved obviously. Finally, the pattern of income distribution should be adjusted, toprevent some people acquiring property income by housing prices too quickly. Weshould improve labor remuneration in income distribution, and strive to establish afair and equitable income distribution system to suppress the income distributionaleffects of the price fluctuations.