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Title: Pair-wise convergence of intra-city house prices in Beijing
Authors: Gabrieli, Tommaso
Panagiotidis, Theodore
Xu, Yishuang
Type: Article
Subjects: FRASCATI::Social sciences::Economics and Business
Keywords: House price convergence
Pair-wise approach
Issue Date: Nov-2019
Publisher: Elsevier
Source: The Journal of Economic Asymmetries
Volume: 20
First Page: e00131
Abstract: This paper examines the long-run convergence of houses prices across the eighteen Beijing districts using monthly dataset that span from January 2006 to December 2014. Following a pair-wise approach, we conduct unit root tests on all N(N-1)/2 possible pairs of housing price differentials across the N districts of Beijing. By doing so we do not select any base-district or regional average as the benchmark. A two-stage approach is employed. In the first stage, unit root tests are employed to investigate the convergence (stationarity) of house price differentials across Beijing. Over half of the intra-city house price differentials are found to be stationary. The second stage of the analysis investigates the drivers of convergence. The probability of a pair being stationarity is negatively affected by income differentials across the eighteen districts, as well as the demographics differentials and supply-side factors. Last, we reveal that the half-life of a shock towards long-run price equilibrium is positively affected by distance and housing supply while little evidence can be found for the influence of income and population density.
ISSN: 1703-4949
Other Identifiers: 10.1016/j.jeca.2019.e00131
Appears in Collections:Department of Economics

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