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China and Global Development Seminar Series

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Institute for China and Global Development

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presents

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Status Competition and Housing Prices in China
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by Prof. Shang-Jin Wei

Columbia Business School

 

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January 20, 2012 (Friday)

11:30 a.m. to 1:00 p.m.

 

Room 910, KKL Building

The University of Hong Kong

Pokfulam Road, Hong Kong

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Remarks:  Non-HKU staff/students who are interested in attending this seminar, please register with Ms. Anna Yip by sending your full name, affiliation and contact details to info@hiebs.hku.hk.  For enquiries, please call 2547 8472. 

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Abstract

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In standard housing economics, housing is regarded as both an asset and a consumption good. In this paper, we study the consequences for housing prices if housing is also a status good. More concretely, if a familyˇ¦s housing wealth relative to others is an important marker for relative status in the marriage market, then competition for marriage partners might motivate people to pursue a bigger and more expensive house/apartment beyond its direct consumption (and financial investment) value. To test the empirical validity of the hypothesis, we have to overcome the usual difficulty of not being able to observe the intensity of status competition.  Our innovation is to explore regional variations in the sex ratio for the pre-marital age cohort across China, which likely has triggered variations in the intensity of competition in the marriage market. We estimate that due to the status good feature of housing, a rise in the sex ratio accounts for 30-48% of the rise in real urban housing prices in China during 2003-2009.

 

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About the Speaker  

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Dr. Shang-Jin Wei is the Director of the Jerome A. Chazen Institute of International Business, Professor of Finance and Economics, Professor of International Affairs, and N.T. Wang Professor of Chinese Business and Economy at Columbia Universityˇ¦s Graduate School of Business and School of International and Public Affairs, and Director of the Working Group on the Chinese Economy and Research Associate at the National Bureau of Economic Research (US), and Research Fellow at the Center for Economic Policy Research (Europe). His research covers international finance, trade, macroeconomics, and China, and has been reported in the Financial Times, Wall Street Journal, Economist, Business Week, Times, US News and World Report, Chicago Tribune, Asian Wall Street Journal, South China Morning Post, and other international news media. He has published widely in world-class academic journals including Journal of Political Economy, Quarterly Journal of Economics, Journal of Finance, American Economic Review, Review of Economics and Statistics, Economic Journal, Journal of International Economics, European Economic Review, Canadian Journal of Economics and Journal of Development Economics. He is the author, co-author, or co-editor of several books including Chinaˇ¦s Evolving Role in the World Trade (with R. Feenstra, forthcoming University of Chicago Press), The Globalization of the Chinese Economy (with J. Wen and H. Zhou, Edward Elgar, 2002), Economic Globalization: Finance, Trade and Policy Reforms (Beijing University Press, 2000), and Regional Trading Blocs in the World Economic System (J. A. Frankel with E. Stein and S.-J. Wei, Institute for International Economics, 1997).


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