Family Planning Policy and Housing Price in China

Abstract

Different intergenerational fertility levels affected by the family planning policy under such altruistic behavior will inevitably affect real estate prices. This paper studies the effect of different intergenerational fertility levels on real estate prices under the parental altruistic behavior model with Chinese characteristics by constructing an Overlapping Generation Model (OLG) with intergenerational wealth transfer. The empirical results show that the lower the intergenerational fertility level of the middle-aged generation, the higher the average wealth level transferred to the youth generation, and the higher the real estate price. This result shows that, unlike the high fertility rate of popular cognition, the low fertility rate of the middle-aged generation under the influence of the family planning policy and the altruistic behavior of the Chinese parents are the important reasons for the current high housing prices. This paper reveals the relationship between China's population policy and real estate price, and can guide the judgment of China's real estate market in the future.