Does Housing Cost Affect Birth Rates in Taiwan? The ADL Test for Threshold Co-integration

Wen-Yi Chen ()
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Wen-Yi Chen: Department of Senior Citizen Service Management, National Taichung University of Science and Technology, Taichung, Taiwan.

Journal for Economic Forecasting, 2013, issue 3, 90-103

Abstract: This study applied the ADL threshold co-integration model to investigate the relationship between fertility and housing cost in Taiwan. Our empirical results were in favor of the threshold co-integration relationship between crude birth rate and cost of childbearing, such as housing cost and opportunity cost. The asymmetric adjustment process of fertility toward the long-run equilibrium was verified. In general, the effects of housing cost and opportunity cost on fertility in the regime of upper threshold were more significant than that in the regime of lower threshold. Recognizing that housing cost is a major cost of childbearing in terms of family formation, the housing price policy should not be managed from the perspective of the equity of housing affordability but from the perspective of how to maintain the social security.

Keywords: ADL test, threshold co-integration; house price, low fertility (search for similar items in EconPapers)
JEL-codes: C32 I15 J11 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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