Seminar: HOME EQUITY ACCESS AND HOUSEHOLD DURABLES CONSUMPTION: EVIDENCE FROM A HOUSING REFORM IN CHINA
School of Business Seminar Room, Level 1, Building 27, UNSW Canberra
Housing property reform in China exerted an exogenous positive shock in terms of the level of equity in their homes to state employees living in employer-provided housing in 1994. This shock emanated from the fact that the employees were offered the opportunity to buy their homes at highly subsidised prices. Exploiting the national representative longitudinal data set in the form of the China Health and Nutrition Survey (CHNS), we estimate the wealth elasticity of consumption using data on durables consumption—air conditioner in particular. A difference-in-differences (DID) strategy is implemented, comparing the consumption of air conditioner not only before and after the reform but also between a treatment group and a control group. We find a significant positive response to the policy shock for the consumption of air conditioner. The research design confirms the underlying identifying assumption of parallel trends. The results are robust to a matched sample regression generated by propensity score matching (PSM) to balance the covariates between the treatment group and the control group.
Xinghua Liu is a PhD candidate at the School of Business, UNSW Canberra. She was awarded Bachelor and Master degree in Economics in Ocean University of China. Her previous research included international trade and marine economics. Current research interests are in urban economics and development economics, with a focus on Chinese real estate market, housing reform and income inequality.