The Effect Of Purchase Quota Of Housing And House Price Fluctuations On Marital Dissolution

In recent years, the price of real estate in our country has raised rapidly, giving rise to a series of economic problems, receiving wide attention from all levels of society. The real estate industry acts as a pillar of the economy in China. In order to stable house prices, our government introduced a series of house price regulation policy under different background of macroeconomic.At the same time, China's marriage market is constantly changing. Marital mismatch and uncertain income shock are two general causes leading to marital dissolution according to Becker( 1977) theory, however,it is difficult to distinguish the later from the former in empirical studies.In China, house and family are almost equivalent. This paper tries to study the effect of China's housing market on marriage, namely the influence of income shocks on marriage. And the focus of this research is to distinguish above two factors. This paper uses two phenomena on the housing market for research. First, this paper takes the Purchase Quota of Housing(PQH) in China in 2010 as an exogenous income shock to investigate the impact of PQH on marital dissolution. Second, this paper uses the unexpected house-price to measure income shocks.The results show that, PQH induces 243 couples to divorce, which equals to 4.5% of the average number of divorce. At the same time, unexpected house-price fluctuations significantly affect divorce rate, house prices rose 10%, divorce increased by 4%. All of these show that the income shocks have a significant impact on divorce and housing market and marriage market are inseparable in China. So to strengthen the regulation of housing market is beneficial to the stability of the marriage market.