Do house prices and marriages move together in China?

Abstract

This paper tests the duration model to evaluate the causality relationship between house prices (HP) and marriages (MR) in China. The results find that HP do Granger cause MR in Western regions and vice versa. In the other three regions the HP does not Granger cause the MR except for Beijing and Henan in the Eastern and Central regions respectively. The shortage in the land supply, higher income, and population in the Eastern region results in housing problems and increases the competition for MR. However, relaxed land supply and a low developmental level make real estate less attractive for investors but do not hinder MR in the Western region. Moreover, MR is leading HP in Jilin in the Northeastern region because of the gender imbalance and lowest fertility rate which increases the housing demand for MR. Our results conclude that HP influence MR positively which is contrary to the duration model, stating that rising HP will decrease the MR. The government should balance regional development, the housing market, and social coordination to minimize the rising HP on the MR. As a result, it will prevent the MR from declining and will mitigate the sex-ratio imbalance as well as the housing market.