Do house prices squeeze marriages in China?

Chi-Wei Su, Khalid Khan, Lin-Na Hao, Ran Tao and Adelina Dumitrescu Peculea

Economic Research-Ekonomska Istraživanja, 2020, vol. 33, issue 1, 1419-1440

Abstract: This study reviews the threshold effect of house prices (HPs) on marriage (MR) in China by utilizing a panel threshold regression. The findings indicate that HPs have a positive impact on MR when the price is below the threshold value. Homeownership is an extremely important factor in MR in China, and MR without housing is considered incomplete. However, HPs have a negative effect on MR when the price is higher than the threshold value. Unemployment and female education have a negative effect on MR, while GDP per capita has a positive effect. These results are supported by the duration model, which shows that as HPs increase, the rate of MR decreases. The study makes a contribution on the asymmetric impact of high HPs on MR in China in the two regimes. The paper offers insight into the economic outlook on HPs and MR driven by societal and institutional changes, such as privatization and state ownership of enterprises, that have changed marriage behavior. Increasing HPs slow MR and may have a more serious impact on China than on other countries. The government should balance housing supply and demand by enhancing antimonopoly supervision in the private market. The government should establish policy measures to meet housing demand and create incentives to wed, which can relieve competition in marriage markets. Diversified investment, in turn, can control HPs.

Date: 2020
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DOI: 10.1080/1331677X.2020.1746190

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