Yiqi Zhao

Date of Award

2016

Document Type

Thesis

Degree Name

Bachelors

Department

Social Sciences

First Advisor

Yu, Sherry

Area of Concentration

Economics

Abstract

This thesis offers a comprehensive overview of the Chinese housing market and the evolution of housing policies. It investigates the potential factors contributing to housing price volatility over the past 15 years, with special focus on the one-child policy (OCP). Using a panel data approach to analyze national-level and province-level data in China from 2000-2014, I find that per capita gross regional product (GRP), per capita urban wage, interest rate, total floor space of residential building sold (TFS), and graduates to population ratio (GPR) all have a significant impact on housing prices at the national level. The impact of each variable on regional housing prices, however, varies. The results have also shown that the housing market was resilient during the 2008 financial crisis possibly because investors shifted their holdings to the housing market after the stock market crashed. A series of policy interventions also ensured the housing market’s continued viability. Most importantly, I find tentative evidence that in Tier 0 regions, the increase of housing prices is also a by-product of the one-child policy (OCP) that generated from excessive demand of intergenerational wealth transfer and accumulation.

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