Essays on Housing Market Transaction Taxes and Migration in China
Open AccessThis dissertation consists of three separate empirical studies focusing on various economic aspects in China. The first chapter studies the impact of transaction taxes on Shanghai’s newly-built housing market. The second chapter explores the relationship between Hukou system and internal migration in China. The third chapter analyzes the impact of the Hubei lockdown on migration dynamics in China. Chapter 1 examines the impact of transaction taxes on Shanghai’s newly-built housing market. In 2005, the Shanghai government took steps to promote the availability of middleclass housing (i.e., affordable mid-sized homes) with the introduction of relatively lower transaction tax rates for housing units below 140 square meters (sqm). This paper uses novel data to examine the implications of these transaction taxes on the newly-built housing market in Shanghai between 2004 and 2007. The study finds that the combination of a 1.5% relative decrease in deed tax, a 5.5% relative decrease in sales tax, and a maximum of 5% relative decrease in land value-added tax for housing units below 140 sqm increased the supply of units in the 100-140 sqm range by 41.3% compared to those in the 140-180 sqm range. Moreover, the paper reveals that the relatively lower transaction taxes led to a 6.55% decrease in the average price of housing units below 140 sqm compared to those above. Evidence suggests that this price decrease was the result of a shift in the composition of units developed after the policy was introduced. Overall, the findings demonstrate that housing transaction taxes in Shanghai had significant implications on the distribution of home sizes in the newly-built market. Chapter 2 seeks to provide a nuanced understanding of the relationship between Hukou system and migration flows in China by considering the influence of Hukou-binding welfare benefits. It employs a random utility model that integrates both Hukou stringency and its associated benefits to explore migrants’ location choice decisions. Utilizing provincial pair migration flow data from the 2020 Chinese population census, the empirical results indicate that although Hukou stringency retains a positive association with migration flows even after isolating associated welfare benefits, this positive relationship attenuates when these benefits are considered. The analysis sheds light on the comprehension of how these understudied welfare benefits, such as education, pension, and healthcare, could influence migration decisions. Overall, the findings suggest that Hukou-binding benefits are as crucial as other widely studied regional attributes when examining the impact of Hukou system on migration. Chapter 3 examines the impact of the Hubei lockdown in early 2020 on migration dynamics in China throughout the enforcement and six weeks after the reopening. Utilizing inter-provincial mobility data from Baidu Migration, the empirical analysis reveals a substantial decline in migration intensity towards Hubei province during the lockdown (81.79%), as well as a lasting reduction post-reopening (68.21%), compared to provinces that did not undergo a lockdown. The magnitude of estimates implies that the lockdown equivalently decreased the utility of migrating to Hubei as would an increase in the distance by 58.4% during the lockdown and 44.6% afterwards. These findings suggest that the lockdown has led to enduring declines in Hubei’s attractiveness to migrants. These persistent post-lockdown effects could be explained by the theories of increasing returns, increased concerns about potential future lockdowns, or migrants re-optimizing their location choices due to disruptions caused by the pandemic.
- All rights reserved
Notice to Authors
If you are the author of this work and you have any questions about the information on this page, please use the Contact form to get in touch with us.