Abstract: Located in West China, Chengdu and Xian are two spatially close cities. Hence, their housing markets may move together due to similar macro-regulative policies, short geographical distance, and close trade ties. This paper aims to study the new home markets between Chengdu and Xian. Data were monthly house price indices over the period from January 2011 to August 2020. We tested for unit root using the ADF, PP tests, and the Perron test (Model C). Cointegration tests used the Engle-Granger and Johansen methods. We found no long-run relationships, which may be attributed to geographical barriers for a long period and typical climate difference. We estimated VARs. A uni-directional causal effect was suggested running from Xian to Chengdu. The short-run dynamics may help the development of a long-run connection. In the long run, home investors may gain from a home portfolio across these two cities.
Keywords: Long-run equilibrium, house price, market, dynamic, Granger causality, VAR model.
Title: Predictivity of House Prices between Cities: The Case of Chengdu and Xian
Author: Gao- lu Zou
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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