Property Tax in China: Is It Effective in Curbing Housing Price?
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| Title | Property Tax in China: Is It Effective in Curbing Housing Price?
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| Author | Zhang Qingyong and Zheng Huanhuan |
| Organization | School of Agricultural Economics and Rural Development, Renmin University of China; Institute of Global Economics and Finance, The Chinese University of Hong Kong |
| Email | qyzh@ruc.edu.cn；arwenzh@gmail.com |
| Key Words | Property Tax; Housing Price; Synthetic Control; Placebo Test |
| Abstract | This paper studies the effects of the property tax, implemented in Shanghai and Chongqing since January 28, 2011, on the housing price. Applying the synthetic control method of Abadie, Diamond, and Hainmueller (2010), we construct counterfactual housing price for Shanghai and Chongqing using monthly data from 33 cities that have no property tax. Comparing the counterfactual and actual price, we estimate that by November 2012 the average housing price in Shanghai was about 2127 RMB/m2 or 13.4% lower than it would have been in the absence of the property tax. This evidence is found to be significant using placebo test. We find no significant evidence that property tax is effective in curbing the housing price in Chongqing. |
| Serial Number | WP522 |
| Time | 2013-10-15 |
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