Research On The Relationship Between Fiscal Deficit,Land Finance And House Price Level

In recent years,China's real estate market has developed rapidly.In 2017,China's GDP grew by 6.9%from the previous year,and the total GDP reached 82 trillion,of which the real estate industry accounted for 11 trillion,accounting for about 13%,and was an important force in China's economic growth.However,the rising housing prices also had an important impact on the public's demand for housing,and the serious social moods that cannot afford housing fill the society.There are many literatures about the rise of housing prices in the theoretical community,mainly focusing on supply and demand,demographic structure,public policies,promotion of officials,etc.However,research from the perspective of finance is still relatively small.This article believes that after the reform of the tax distribution system in 1994,the imbalance in local fiscal revenues and fiscal budgets led to an increasingly serious fiscal deficit.In this context,"land finance" has become a common practice and has been prolonged.It is worth in-depth study whether fiscal deficits and land finance have any impact on housing prices.This article studies the relationship between financial factors and housing prices along the fiscal deficits-land finance-the logical clues of house prices.This has important theoretical and practical significance for revealing the mystery of the continuous increase of real estate prices and effective governance of housing prices.There are five parts in this article.The first part introduces the background significance of the article selection and the literature review.At the same time,it elaborates the main content and methods of the article research,and points out the innovation and deficiency of the article.The second part is the analysis of the basic system of the fiscal deficit,"land finance" and house prices.This section sorts out the financial system reforms,land system reforms,and urban housing system changes in China.It analyzes the fiscal deficits and the causes of the formation of "land finance,"and explores fiscal deficits,"land finances," and housing prices through scatterplots and other forms.There may be internal links.The third part is the theoretical analysis of the relationship between fiscal deficits,"land finance" and house prices.Through the establishment of models covering housing owners,house developers,and local governments,the authors analyze the interaction of the three in determining a balanced housing price and land prices.Intrinsically linked,and put forward two theoretical assumptions that "land finance" has a positive impact on house prices and different levels of fiscal deficit under the influence of land finance on house prices.The fourth part is the empirical part.This section selects the panel data of 277 prefecture-level cities in China from 2002 to 2015.Based on the ordinary panel regression model,the panel threshold regression model in the non-linear model is used to select the fiscal deficit level as Threshold variables,to verify the relationship between the fiscal deficit,"land finance" and house prices.Finally,it is concluded that the "land finance" scale of local governments has a positive effect on housing prices;the higher the fiscal deficit level,the stronger the "land finance" scale has played on the promotion of housing prices.Finally,based on the empirical conclusions and the current situation of China's system,this paper proposes some recommendations as follows:First,to clarify the financial power and authority of the governments at all levels in the form of laws,so that the local government's financial power and the right to match,improve the proportion of local tax sharing,expand the local tax source.Secondly,in response to the shortcomings of the land transfer budget supervision system,it proposes to formulate a unified system and management system,strengthens supervision,and imposes heavy penalties.At the same time,it is necessary to strictly monitor the cost of each link and strengthen the national land sector and finance.The department's ability to collaborate will share relevant information departments,promote effective supervision in real time,and safeguard national interests.Third,increase the central government's share of land revenues,weaken the local government's reliance on "land finance",and finally,change the current supply.The way to break the government monopoly land supply mode,formulate non-real estate enterprises to obtain land use rights according to law as a method for residential land,deepen the use of rural collective construction land for the construction of leased housing pilot.The innovation of this paper lies in considering the nonlinear relationship between variables in the empirical analysis,using the panel threshold regression method in the nonlinear model to study the relationship between the fiscal deficit,"land finance"and housing prices;The literature uses panel data of provincial or 70 large and medium-sized cities.This paper selects the panel data of 277 prefecture-level cities from 2002 to 2015 to make up for the insufficiency of the existing literature data.The limitation of this paper is that due to the use of prefecture-level city data,some indicator values are not easily accessible,and the selection of control variables may face the problem of missing variables.