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This paper examines the impacts of local housing sentiments on the housing price dynamics of China. With a massive second-hand transaction dataset, we construct monthly local housing sentiment indices for 18 major cities in China from January 2016 to October 2020. We create three sentiment proxies representing the local housing market liquidity and speculative behaviors from the transaction dataset and then use partial least squares (PLS) to extract a recursive look-ahead-bias-free local housing sentiment index for each city considered. The local housing sentiments are shown to have robust predictive powers for future housing returns with a salient short-run underreaction and long-run overreaction pattern. Further analysis shows that local housing sentiment impacts are asymmetric, and housing returns in cities with relatively inelastic housing supply are more sensitive to local housing sentiments. We also document a significant feedback effect between housing returns and market sentiments, indicating the existence of a pricing-sentiment spiral which could potentially enhance the ongoing market fever of Chinese housing markets. The main estimation results are robust to alternative sentiment extraction methods and alternative sentiment proxies, and consistent for the sample period before COVID-19. [ABSTRACT FROM AUTHOR]

This paper evaluates the labor market effects of subway systems on low-skilled workers. A simple model of labor supply predicts that access to subway services can decrease transportation costs and improve labor force participation, but has ambiguous effects on the intensive margin of labor market outcomes. Empirical estimates from US cities show that a 10% expansion in subway miles increases the labor force participation of low-skilled individuals without a car by eight percentage points. However, subway expansions have no significant effect on the labor force participation of low-skilled individuals who own automobiles or on high-skilled workers. In contrast, expansions of light rails and buses have no significant effect on the labor market outcomes of low-skilled individuals. Improved subway services do not affect wages, hours worked, and commuting times, suggesting that the labor market benefits of subways mainly lie in the extensive margin of labor supply. [ABSTRACT FROM AUTHOR]