Abstract: This paper finds that housing prices are integrated of order one, denoted by I(1). Sub-housing (new goods residential) markets and residential stock markets were not cointegrated. Hence, first-differenced (FD) VARs were constructed and computed. A feedback effect was suggested between these two types of housing markets. The short-run elasticity of new home prices relative to old house prices is about -1.52. The short-run elasticity of old home prices relative to new house prices is 0.92, a near unity elasticity. Effects coming from these two markets differ notably. The old home market shows a greater impact than the new one does. We argue that housing transactions centered on the stock residential market are beneficial for a sustainable housing market.
Keywords: Housing, price, long run, short run, stock market, goods housing, feedback.
Title: How Effects Arising from Sub-housing Markets Differ in Changsha, China
Author: Gao-lu Zou
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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