Empirical Research On The Real Estate Wealth Effect Of Urban Residents In China

The real estate wealth effect of Chinese urban residents refers to the impact of changes in house prices affect the value of urban property owners and then affect their consumption process.For a long time,China's final consumption rate has remained in a quite low level,which is in stark contrast to the rapid growth of China's economy.Under the "new normal",expanding consumer demand is the best choice to solve the problem of sustainable growth.In the past two decades,real estate has become a major component of China's urban residents'household assets,and its share has also risen rapidly with the rise in housing prices.In this background,the study of real estate wealth effects has important theoretical and practical significance.The study of real estate wealth effect was mainly based on modern consumption theory.At first,we reviewed both the domestic and foreign research on real estate wealth effect theory and gave a brief conclusion.Then we lay a theoretical foundation for empirical research by combing the development process of modern consumer theory.In the empirical test part,we first introduced the current status of China's urban household consumption and the real estate development process.Then we conducted a correlation test between house price growth and urban household consumption growth.The test results after removing seasonal trends at constant prices showed that the correlation is as high as 98.22%.Based on the the consumption theory under uncertainty,this paper used modern econometrics methods and used the latest data to study the real estate wealth effects of Chinese urban residents.The test results of VAR and VECM models showed that real estate wealth effects exist both in the long-term and short-term period.The increase and decrease of house prices will have a significant impact on Chinese urban residents' consumption.Combined with empirical tests,this paper proposes three policy recommendations:accelerating the establishment of a long-term mechanism for the stable development of the real estate market,strengthening the construction of the insurance system,and preventing credit risks.