Have housing prices contributed to regional imbalances in urban–rural income gap in China?: Fid-Bau Portal

Have housing prices contributed to regional imbalances in urban–rural income gap in China?

Yin, Xiao‑Cui / Su, Chi-Wei

Abstract High housing prices and the urban–rural income gap are two important social problems that China is facing currently. Due to the imbalance of regional economic development, the relationship between housing prices and urban–rural income gap in regions may also be different. This study examines this relationship across regions in China by employing the bootstrap panel Granger causality method. We find that regional differences obviously exist between the housing prices and the urban–rural income gap. Housing prices have widened the urban–rural income gap in the eastern region, have narrowed it in the northeastern region, and have no significant impacts in the central and western regions. On the other hand, the urban–rural income gap is an important driver of the increasing housing prices in the eastern region, has suppressed them in the central and northeastern regions, and has no significant influence in the western region. The government may curb the excessive growth in housing prices to avoid widening the urban–rural income gap in the eastern region. For the northeastern region, boosting the housing market may help to narrow the income gap. For the central and western regions, policies should be committed to raising the resident income to reduce the income gap. These can provide references for policy-making.