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Housing Bubbles and Housing Wealth Effect
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TitleHousing Bubbles and Housing Wealth Effect  
AuthorHe Xingqiang and Yang Ruifeng  
OrganizationLingnan College, Sun Yat-sen University; 
Key WordsConsumption; Housing Wealth Effect; Housing Bubbles; Housing-Price-to-Income 
AbstractUsing China urban household survey data collected from 41 cities in 2009, with housing-price-to-income ratio as a proxy variable of housing bubble, we investigate whether the housing bubble affects the housing wealth effect of household consumption. We also examine the impact of housing bubble on housing wealth effect of different households, including those who own two or more houses, have houses rented to others, own commercial houses and non-commercial houses, and households at different income level. Our main findings are as follows: High housing bubble impairs the effect of housing wealth on consumption. Confronted with housing bubble, the housing wealth effect of households who own two or more houses, or have houses rented to others suffers less impairment; Owning commercial houses alleviates the impairment of housing bubble on housing wealth effect, whereas owning non-commercial houses does not; households with higher income suffer less impairment than those with lower income. The above findings suggest rich policy implications. 
Serial NumberWP1225 
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