On the Effectiveness and Externalities of the Home Purchase Restriction Policy in China
- ZHU Kairong, LI Pei & XIE Zhenfa
- Xiamen University, 361005
To curb the soaring housing prices, the Chinese government has been focusing on macro-control of real estate on the demand side. The Home Purchase Restriction (HPR) policy is one of the most commonly used policy tools, and its influence has attracted wide attention from the public and the academia as well. Although many scholars have studied the effectiveness of the home purchase restriction policy, there is no universal conclusion and empirical research on the externalities of this policy is scarce. Based on the daily transaction data of the real estate sales and rental market and the land market, this paper uses the difference-in-differences model to evaluate the effectiveness of the HPR more accurately, further includes the association of different markets into the analytical framework, and explores the externalities the HPR policy has on the real estate rental market and the land market. The empirical results show that the HPR policy lowers the house price by 10.12%, higher than the estimated results of previous studies, drives up the rent by 25.09% while lowers the residential land price by 9.08%, with no significant impact on industrial and commercial land prices. The results of Propensity Score Matching analysis, other robustness tests and counterfactual analysis all back up the reliability of the empirical results. The externalities of the HPR policy indicate that the policy is not conducive to the welfare of people with rigid housing demand, and may trigger the “soft resistance” of local governments. Therefore, the government should focus on how to promote the supply-side structural reform of the land market and real estate market while strengthening the local taxation system.
JEL：G12, G18, H83
- Home Purchase Restriction Policy, Policy Effectiveness, Policy Externalities, Difference-in-Differences Model