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Pair-wise convergence of intra-city house prices in Beijing

Gabrieli, T; Panagiotidis, T; Xu, Y; (2019) Pair-wise convergence of intra-city house prices in Beijing. Journal of Economic Asymmetries , 20 , Article e00131. 10.1016/j.jeca.2019.e00131.

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Abstract

This paper examines the long-run convergence of houses prices across the eighteen Beijing districts using monthly dataset that span from January 2006 to December 2014. Following a pair-wise approach, we conduct unit root tests on all N(N-1)/2 possible pairs of housing price differentials across the N districts of Beijing. By doing so we do not select any base-district or regional average as the benchmark. A two-stage approach is employed. In the first stage, unit root tests are employed to investigate the convergence (stationarity) of house price differentials across Beijing. Over half of the intra-city house price differentials are found to be stationary. The second stage of the analysis investigates the drivers of convergence. The probability of a pair being stationarity is negatively affected by income differentials across the eighteen districts, as well as the demographics differentials and supply-side factors. Last, we reveal that the half-life of a shock towards long-run price equilibrium is positively affected by distance and housing supply while little evidence can be found for the influence of income and population density.

Type: Article
Title: Pair-wise convergence of intra-city house prices in Beijing
DOI: 10.1016/j.jeca.2019.e00131
Publisher version: https://doi.org/10.1016/j.jeca.2019.e00131
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: House price convergence, Pair-wise approach, Cointegration
UCL classification: UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > The Bartlett School of Planning
URI: https://discovery.ucl.ac.uk/id/eprint/10083178
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