Assessing the impact of the demographic dividend on real estate prices: empirical evidence from China

Abstract

To elucidate the impact of the demographic dividend on real estate prices, this article uses the latest Chinese provincial data over the 2002–2013 period. The panel vector autoregression (PVAR) model combined with the impulse response function (IRF) is used to investigate the direct and indirect mechanisms of the demographic dividend that cause real estate price escalation in both the short and long term. The empirical results indicate that the demographic dividend, particularly city residents’ disposable income, can not only directly increase real estate prices but also indirectly increase prices through intervening channels, such as real estate loans.

Keywords:

• demographic dividend
• real estate price
• housing marketization
• Chinese data

JEL Classification:

• R31
• J10
• C53

Acknowledgement

We would like to thank the anonymous reviewers for their useful comments.

Notes

¹ Correlation analysis shows a linear correlation between the logarithms of all variables, and the variables all passed the unit root test. Based on the result of the Hausman test, a fixed-effect model is adopted.

Additional information

Funding

This work was supported by National Natural Science Foundation of China [grant number 71273048], [grant number 71473036]; Ministry of Education of the People’s Republic of China [grant number 14YJC630202]; Ministry of Education of Jiangsu Province [grant number 2014SJD013]; Social Science Research Grant of Southeast University [grant number 2242015S22005] and European Commission.