Pair-wise convergence of intra-city house prices in Beijing
Theodore Panagiotidis and
The Journal of Economic Asymmetries, 2019, vol. 20, issue C
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.
Keywords: House price convergence; Pair-wise approach; Cointegration (search for similar items in EconPapers)
JEL-codes: C2 C3 R1 R2 R3 (search for similar items in EconPapers)
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Working Paper: Pair-wise Convergence of Intra-city House Prices in Beijing (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joecas:v:20:y:2019:i:c:s1703494919300702
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