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How do housing prices affect consumption in China? New evidence from a continuous wavelet analysis
- Source :
- PLoS ONE, PLoS ONE, Vol 13, Iss 9, p e0203140 (2018)
- Publication Year :
- 2018
-
Abstract
- In this paper, we revisit the relationship between housing prices and consumption in China by using a continuous wavelet analysis. This method provides an insight into the dynamic nexus in both time and frequency domains. In general, Empirical results show that there is a positive relationship between the two series in China, although it varies across time and frequencies. First, we find that disposable income is the core factor which affects both consumption and housing prices in China. Second, housing prices have a weak wealth effect on consumption in most time. High housing ownership and proportion of housing asset in the total household asset lead to a wealth effect of housing prices on consumption. Third, in the long term, there is a significant wealth effect of housing prices on consumption, but it weakens after 2008, which implies that excessively high housing prices in recent years have partially constrained residents' consumption. These findings have important implications for seeking housing market regulation and expanding domestic consumption decisions.
- Subjects :
- China
Time Factors
Asia
Economics
Wavelet Analysis
Macroeconomics
lcsh:Medicine
Social Sciences
Monetary economics
Affect (psychology)
Human Geography
Geographical Locations
Development Economics
Economic Growth
0502 economics and business
Humans
Asset (economics)
050207 economics
lcsh:Science
Financial Markets
Consumption (economics)
050208 finance
Multidisciplinary
Geography
Physics
lcsh:R
05 social sciences
Financial market
Commerce
Economic Analysis
Core (game theory)
Models, Economic
Wealth effect
Physical Sciences
People and Places
Housing
Income
Earth Sciences
Waves
lcsh:Q
Nexus (standard)
Coherence
Finance
Research Article
Subjects
Details
- ISSN :
- 19326203
- Volume :
- 13
- Issue :
- 9
- Database :
- OpenAIRE
- Journal :
- PloS one
- Accession number :
- edsair.doi.dedup.....7dcedb7a7cb4dafe6348d4a4853c8ce8