Spatial interrelations of Chinese housing markets: Spatial causality, convergence and diffusion

Yunlong Gong, Jinxing Hu and Peter J. Boelhouwer

Regional Science and Urban Economics, 2016, vol. 59, issue C, 103-117

Abstract: This paper comprehensively tests the spatial interrelationships of 10 housing markets in the Pan-Pearl River Delta (Pan-PRD) in China, including the properties of spatial causality, convergence and diffusion patterns. The pairwise Toda-Yamamoto Granger causality tests suggest widely existing leading-lag relationships between housing markets; a unidirectional causal flow from the eastern-central area to western China can be tentatively confirmed. However, there is a lack of sufficient evidence supporting pairwise long-run cointegration and convergence, indicating a diverged interurban housing market in the Pan-PRD. In the short run, the spatial-temporal diffusion model manifests the importance of the spillover effect from neighbouring cities in predicting one city's house price changes. Furthermore, the generalized impulse response functions (GIRFs) clearly depict the transmission pattern of shocks to one chosen city. The diffusion pattern is characterized by the fact that the shocks first spread to nearby cities with cities further away taking a longer time to respond.

Keywords: Spatial causality; Long-run convergence; Ripple effect; Diffusion; House prices; China (search for similar items in EconPapers)
JEL-codes: C31 C33 R21 R31 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0166046216300436
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:59:y:2016:i:c:p:103-117

DOI: 10.1016/j.regsciurbeco.2016.06.003

Access Statistics for this article

Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou

More articles in Regional Science and Urban Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().