Measurement and Impact of the Real Estate Developers’ Monopoly Power: Evidence from the Major Cities in China

Fan Yang () and Hongyu Liu
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Fan Yang: Tsinghua University
Hongyu Liu: Tsinghua University

Chapter Chapter 55 in Proceedings of the 18th International Symposium on Advancement of Construction Management and Real Estate, 2014, pp 569-579 from Springer

Abstract: Abstract A housing market is generally considered as a monopolistic competition market. However, there is still lack of research on the degree and impact of developers’ monopoly power, especially on the city level. To fill in the gap of housing market structure research, three indices are utilized to measure monopoly power of developers from the aspects of market concentration and developers’ pricing power on the city level. Based on the data from the major cities in China, the monopoly power of developers and its influencing effects are empirically analyzed. The results show that the pricing power of developers in one housing market is considerably different from that in the other markets though the market concentration is similar across the major cities. It is also found that monopoly power has significant influence on housing markets. In the market with higher monopoly power, supply elasticity is usually smaller, the growth of housing price is faster and the problem of housing unaffordability is more serious.

Keywords: Monopoly power; Market structure; Developer; Housing market (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-44916-1_55

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DOI: 10.1007/978-3-642-44916-1_55

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