Research & Projects
Research & Projects
Between 2010 and 2015, China’s urban homeownership rate rose by 8.5 percentage points. This paper investigates the sources of that surge using a general equilibrium overlapping-generations (OLG) model with life-cycle housing tenure choice. By embedding fixed-payment mortgages into an OLG framework, the analysis evaluates reductions in down-payment requirements, declines in mortgage rates, the emergence of online real-estate platforms, and the expansion of subsidized affordable housing programs. Key features of the model include the dual role of housing as both a consumption good and an investment asset, as well as tenure choices made by heterogeneous agents. Calibrated to Chinese data, the model shows that in the short run, reductions in mortgage rates and targeted subsidies are the principal contributors to the homeownership surge. A cut in mortgage rates raises ownership by 4.5%, while the expansion of affordable housing programs increases it by 4.7%. The combined effect of four factors can increase homeownership rate by about 7.5% in the short run.
We explore the link between county-level opioid prescription rates and asset prices, specifically, stock returns of firms headquartered in that county, as well as real estate prices. To examine the causal effects of opioid prescription rates on firm stock returns, we first apply an instrumental variable (IV) regression approach and use the opioid prescription rates for old population as the instrumental variable. The results provide robust evidence that opioid prescription rates have a negative causal effect on the equity returns of firms headquartered in that county. Furthermore, we analyze the effect of multiple regulations across states aimed at reducing controlled substance overdose and implement a dynamic difference-in-differences (DiD) estimation. The DiD estimation results show that this policy change has a positive dynamic effect on Californian firms' equity returns. We also find the opioid prescription reduction assistance program provided by California Health Care Foundation (CHCF) raises the median prices of existing single-family homes in those counties by $28,678 on average.
House-Without-Loan vs. Mortgage Rate Cuts: Post-COVID Housing Policy Effects in China
Real estate investment in China contracted sharply during the COVID-19 pandemic and remained sluggish in the year that followed. NBS reported that the property investment contracted 9.6%. This paper develops a general-equilibrium life-cycle model to examine the effects of China’s post-COVID housing policies on homeownership and household utility. The analysis focuses on the impact of the nationwide removal of the lower bound on commercial mortgage rates, the concurrent reduction in Housing Provident Fund loan rates and the nationwide adoption of the “house-without-loan” rule in mortgage qualification. The results show that aligning mortgage rates closely with the loan prime rate increases homeownership among low-income households by 5% in the long run and improves their utility. By contrast, the shift to “house-without-loan” yields limited aggregate effects, suggesting that easing credit costs is more effective than altering eligibility rules in promoting broad-based improvements in homeownership.
We explore the link between county-level opioid prescription rates and asset prices, specifically, stock returns of firms headquartered in that county, as well as real estate prices. To examine the causal effects of opioid prescription rates on firm stock returns, we first apply an instrumental variable (IV) regression approach and use the opioid prescription rates for old population as the instrumental variable. The results provide robust evidence that opioid prescription rates have a negative causal effect on the equity returns of firms headquartered in that county. Furthermore, we analyze the effect of multiple regulations across states aimed at reducing controlled substance overdose and implement a dynamic difference-in-differences (DiD) estimation. The DiD estimation results show that this policy change has a positive dynamic effect on Californian firms' equity returns. We also find the opioid prescription reduction assistance program provided by California Health Care Foundation (CHCF) raises the median prices of existing single-family homes in those counties by $28,678 on average.
This paper provides the first tenure-specific estimates of economic housing depreciation in China and clarifies its functional form. Leveraging 1,776 dwellings from the China Family Panel Studies, this study extends the Shilling et al. (1991) framework by netting out land-price heterogeneity through county fixed effects in a hedonic price model. The results reject linear and convex specifications while showing that depreciation follows a geometric profile. The implied annual depreciation rates are 0.60 % for owner-occupied units and 1.75 % for renter-occupied units, indicating that rental housing loses value nearly three times faster than comparable owner housing. These tenure-differentiated geometric parameters reshape risk-return trade-offs––faster rental decay raises maintenance outlays, shortens optimal holding periods and widens required risk premia, whereas slower owner-occupied decay preserves long-duration wealth, thereby refining collateral valuation, and real estate investment underwriting.