Talent introduction and housing price: a tale of Xi’an

Huwei Wen and Zhao Zhao

Applied Economics Letters, 2019, vol. 26, issue 11, 954-962

Abstract: A comprehensive competition policy for talent introduction was first implemented in Xi’an in February 2017 and has been imitated by many cities in China ever since. Although turned out to be useful in alleviating the problem of talents loss in the lower-tier cities, the policy has been criticized for its potential effect of driving up housing prices. Using the synthetic control method proposed by Abadie and Gardeazabal (2003), we explore the influence of the competition policy for talent introduction on housing prices in Xi’an. Based on the monthly data of Xi’an and 62 control cities across 30 provinces in China from January 2015 to April 2018, we find strong evidence for the positive effect of the competition policy on housing prices. Specifically, the policy increased housing prices in Xi’an by approximately 43% until April 2018.

Date: 2019
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DOI: 10.1080/13504851.2018.1524567

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