The Effect Of Chinese Housing Price On Household Consumption

Since the housing reform,China's housing prices continue to rise,the value of residential real estate also will continue to rise,forming an important part of family wealth.In contrast,the growth rate of Chinese residents' consumption growth is slow and the savings rate is high,which is an important problem for China's economy.It is generally believed that consumption is affected not only by income levels but also by the level of wealth.Consumption growth caused by the growth of real estate wealth was known as the real estate wealth effect.At home and abroad,there is a wealth of research on t the wealth effect of the real estate,but because of the different data and methods,we can not reach a unified opinion.Some think that the real estate wealth effect exists and can significantly promote consumption,and some that the real estate wealth effect exists but will inhibit consumption,while others think that the real estate wealth effect does not exist.So,what is the impact of real estate wealth and household consumption,whether the rise of real estate wealth can promote household consumption,and how to promote consumption has become an important question.So,this paper tries to study the relationship between the real estate wealth and the residents' consumption by using the CHFS data in 2011(China Household Finance survey data).This paper is devoted to the analyse the existence of the wealth effect of real estate and the degree of impact on household consumption,and further analyzes the heterogeneity of real estate wealth effect in different characteristics of the family and finally analyzes the way that real estate wealth affects consumption.First of all,this paper empirically tests the existence of the wealth effect of real estate,and draws the conclusion that the wealth effect of real estate is significant and has a positive effect on household consumption.Rising real estate wealth will promote household consumption.For different types of consumption,the impact of real estate wealth on durable goods consumption is higher than that of non durable goods consumption.Secondly,in order to study the impact of different types of household consumption on the real estate wealth,this paper studies the heterogeneity of the wealth effect of real estate.In this paper,the samples are grouped according to their income,age,region etc.We can draw the following conclusions:(1)the wealth effect of the real estate is in the form of U characters with the family income,which is the most significant in the low-income families,followed by the high-income families.(2)the wealth effect of real estate has heterogeneity in the age of the householder,the wealth effect of the real estate of the young family is higher than that of the old family.(3)in different regions,the impact of real estate wealth consumption is also different.The wealth effect of the real estate in the East is the strongest,followed by the middle and the west is not significant.The wealth effect of real estate may be related to the level of economic development.(4)the wealth effect of households with multiple sets of houses is significantly greater than that of households with only one property.Thirdly,this paper studies the mechanism of real estate wealth influencing consumption,and through the stepwise test of mediating effect,it is concluded that real estate wealth affects household consumption by influencing the family's risk attitude.The higher the wealth of real estate,the lower the risk aversion,and the more of household consumption.Finally,in order to test the stability of the research,this paper uses 3 methods to test the robustness,which is to change the key explanatory variables,the shrinkage of the sample,the use of agents to expand the sample size.Results the wealth effect of the real estate is steady.