State misallocation and housing prices: Theory and evidence from China

  • Wang S
  • 73

    Readers

    Mendeley users who have this article in their library.
  • 36

    Citations

    Citations of this article.

Abstract

This paper examines the equilibrium price effects of the privatization of housing assets that were previously owned and allocated by the state. I develop a theoretical framework that shows that privatization can have ambiguous effects on prices in the private market, and tha the degree of misallocation of the assets prior to privatization determines the subsequent price effects. I test the predictions of the model using a large-scale housing reform in China. The results suggest that the removal of price distortions allowed households to increase their consumption of housing and led to an increase in equilibrium housing prices.

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document

Authors

  • Shing Yi Wang

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free