The Impact Of Politics And Economy On Property Values

With the continuous development of the real estate market in China,property values are rising rapidly and become the hidden danger of social stability and development.Controlling property values is still an important part of government policy.To figure out the factors that affect property values is very important for us to understand this situation and to choose effective measures to control the problem.In the study of property values,most scholars have focused on macroeconomic factors,market supply and demand factors,and so on.Some scholars have also focused on the impact of local government behavior on the real estate market.Resident has obtained the right to live in the city and the access of public services by buying property.The better the public services provided by the local government,the resident would be willing to pay higher prices for the property,which is called the capitalization of public services.In addition,the change in property value is not only a long-term trend,but also a cyclical fluctuation,which may relate to political factors.This paper analysis the impact of public service and political cycle on property values using Bayesian Model Averaging(BMA).The main structure of this paper is as follows:The first part is the prolegomenon,summarizing the theoretical and practical significance,related concepts,research contents and methods;also sum up the insufficient and innovative points.Next chapter is literature review,which introduces relevant research,and focus on the research of financial factors.Next chapter introduces the basic situation of the property values,local fiscal revenue and expenditure.The fourth chapter makes an empirical analysis using the Hedonic Model Theory to test the impact of fiscal expenditure and public service on property values.The fifth chapter studies the impact of the political cycle on housing price,including literature review and empirical analysis.The sixth chapter provides policy suggestions to control property values.There are two innovative points in this paper.First,the Bayesian Model Averaging(BMA)is adopted to solve the uncertainty of model form and variables.Second,it examines the long-term trend of property values in views of public service,as well as the shorrt-term fluctuation in view of political cycle.The main conclusion of this paper is that both financial expenditure and public service have a significant impact on property value.In short term,property values have cyclical fluctuations around the replacement of Party Congress and officials.According to the empirical results,we believe that government departments should improve the supply mode of public goods,and put more resources into aspects that are more beneficial to residents,such as education and transportation.In order to reduce the regional difference of property values,the central government should increase the investment of local public services in central and western regions.At the same time,the government should speed up the formulation of property tax system and control property values effectively using property tax.In addition,the government should pay attention to the impact of the political cycle on property values and try to keep policy stable.The government should also pay attention to the promotion system of officials and consider improving the evaluation system.