Post date: Oct 08, 2012 12:8:25 AM
"State misallocation and housing prices: theory and evidence from China", by Shing-Yi Wang, AER
Slides
Housing reform is also one of the policies to implement Deng's open-door plan. Other policies are
1. FDI, introduce foreign capital investment
2. Birth control, one-child policy
3. Compulsory education
...
Hukou system is essential for China's housing market. One needs to realize that the subsidized housing is based on the strictly controlled register system.
Non-stationary data is one concern about applying China's data for academic research. When using reduced form regression, it implies that the economy is equilibrium and everyone optimizes. But for an economy in the transitional stage, a structural model is required to capture the endogeneity and heterogeneity.