|
|
|
| Housing Prices, Housing Demand, and the Debt Ratio of Chinese Households |
| ZHOU Guangsu,WANG Yaqi
|
School of Labor and Human Resources, Renmin University of China;
School of Finance, Central University of Finance |
|
|
|
Abstract Summary: The unprecedented rise in China's household leverage has attracted a great deal of public attention. In this paper, we examine how household borrowing responds to large movements in asset prices. The answer to this question is fundamental in macroeconomics and finance and has crucial implications for understanding how asset price shocks generate business cycle fluctuations. The literature suggests that high household leverage might lead to increased mortgage default rates and trigger an economic recession (Midrigan and Philippon, 2011; Mian and Sufi, 2009, 2011). Another line of research has tried to explain the increase in household leverage by the rise in house prices (Hurst and Stafford, 2004; Cooper, 2009; Mian and Sufi, 2011). These studies have documented an important collateral channel whereby an increase in the value of a self-owned house will relax the household's financial constraints, and make the household borrow and consume more. However, the sudden increase in household leverage in China has yet to be explained. In this paper, we examine whether the collateral channel exists in China. We also propose two additional channels via which the surge in house prices may have contributed to the sudden increase in household leverage.
Based on household level housing and debt information drawn from the Chinese Family Panel Studies (CFPS) for 2014 and 2016, we show that the appreciation in house prices indeed contribute to the increase in household leverage. Quantitatively, we find that a 100% increase in the price of a house leads to 288.1% and 39.2% increases in household debt and leverage, respectively. By further splitting our sample into several subsamples, we also find that the house price movements have heterogeneous effects on household leverage. Specifically, we find that urban hukou households with spouses and children have a greater increase in household leverage than rural hukou households without spouses and children. Moreover, we find that some of the data patterns are at odds with or cannot be well explained by the “collateral channel.” Therefore, we propose two additional channels, the “financing channel” and the “speculation channel,” and confirm that these channels have a strong influence on our sample. Furthermore, we find that most households finance their housing purchases by bank loans instead of private lending.
Our paper contributes to the literature on household leverage in two important ways. First, the “borrowing for housing purchase” scenario provides a possible explanation for the unprecedented increase and highly imbalanced geographical distribution of household leverage in China. Since 2000, the literature has increasingly focused on the rapid expansion of total household debt and household leverage in developed countries, and views this changing pattern as the product of the increased availability of mortgage credit and other innovative consumption loans in the U.S. and Europe (Casolaro et al., 2006; Mian and Sufi, 2011). However, to the best of our knowledge, no studies have sought to explain the features of household leverage in China. In this sense, this paper is the first attempt to build a bridge between these two vitally important characteristics of Chinese economy, namely, the rapid increases in the housing prices and household leverage in big cities.
Second, our paper contributes to the literature by providing three channels through which increased housing prices might lead to increased household leverage. In particular, the two additional channels proposed in this paper complement the collateral channel examined in the literature (Berger et al., 2015; Aladangady, 2017; Cheng, 2017). The collateral model shows that increased house prices can relax the households' borrowing constraints by increasing their collateral value, and thereby generate significant increases in household consumption and leverage (Ortalo-Magné and Rady, 2008; Mian and Sufi, 2011), which is most relevant to our paper. However, distinct from the literature, we find that there is no collateral channel in our sample. A possible explanation for this finding is that the rise in house prices is more significant and persistent after 2008 than before 2008, thus increasing the incentives for speculation in the later period.
|
|
Received: 09 August 2018
Published: 27 June 2019
|
|
|
|
|
| [1] |
陈斌开和李涛,2009,《中国城镇居民家庭资产—负债现状与成因研究》,《经济研究》增1期,第55～66页。
|
| [2] |
陈斌开和杨汝岱,2013,《土地供给、住房价格与中国城镇居民储蓄》,《经济研究》第1期,第110～122页。
|
| [3] |
陈彦斌和邱哲圣,2011,《高房价如何影响居民储蓄率和财产不平等》,《经济研究》第10期,第25～38页。
|
| [4] |
姜超、顾潇啸和于博,2016,《中国居民杠杆率并不低,偿付能力正受巨大考验》,海通证券宏观报告。
|
| [5] |
李凤、罗建东、路晓蒙、邓博夫和甘犁,2016,《中国家庭资产状况、变动趋势及其影响因素》,《管理世界》第2期,第45～56页。
|
| [6] |
李涛和陈斌开,2014,《家庭固定资产、财富效应与居民消费:来自中国城镇家庭的经验证据》,《经济研究》第3期,第62～75页。
|
| [7] |
刘行、建蕾和梁娟,2016,《房价波动、抵押资产价值与企业风险承担》,《金融研究》第3期,第107～123页。
|
| [8] |
魏玮和陈杰,2017,《加杠杆是否一定会成为房价上涨的助推器？——来自省际面板门槛模型的证据》,《金融研究》第12期,第48～63页。
|
| [9] |
吴卫星和吕学梁,2013,《中国城镇家庭资产配置及国际比较——基于微观数据的分析》,《国际金融研究》第10期,第45～57页。
|
| [10] |
吴卫星、邵旭方和陶利斌,2016,《家庭财富不平等会自我放大吗？——基于家庭财务杠杆的分析》,《管理世界》第9期,第44～54页。
|
| [11] |
颜色和朱国钟,2013,《“房奴效应”还是“财富效应”——房价上涨对国民消费影响的一个理论分析》,《管理世界》第3期,第34～47页。
|
| [12] |
郑世林、韩高峰和石光,2016,《房地产限购对公司违约风险的影响》,《世界经济》第10期,第150～173页。
|
| [13] |
张明,2017,《警惕居民杠杆率的过快上升》,《中国外汇》第20期。
|
| [14] |
Aladangady, A.. 2017. “Housing Wealth and Consumption: Evidence from Geographically Linked Microdata”, American Economic Review, 107(11):3415～3446.
|
| [15] |
Berger, D., V. Guerrieri; G. Lorenzoni and V. Joseph. 2018. “House Prices and Consumer Spending.” Review of Economic Studies, 85(3):1502～2542.
|
| [16] |
Campbell, J. Y. and J. F. Cocco. 2015. “A Model of Mortgage Default”, Journal of Finance, 70(4), pp.1495～1554.
|
| [17] |
Campbell, J. Y. and J. F. Cocco. 2007. “How Do House Prices Affect Consumption？ Evidence from Micro Data”, Journal of Monetary Economics, 54(3):591～621.
|
| [18] |
Casolaro, L., L. Gambacorta and L. Guiso. 2006. “Regulation, Formal and Informal Enforcement and the Development of Household Loan Market: Lessons from Italy”, The Economics of Consumer Credit, MIT Press, pp.93～134.
|
| [19] |
Chaney, T., D. Sraer and D. Thesmar. 2012. “The Collateral Channel: How Real Estate Shocks Affect Corporate Investment”, American Economic Review, 102(6):2381～2409.
|
| [20] |
Cheng, D.. 2017. “Housing Boom and Non-Housing Consumption: Evidence from Urban Households in China”, Job Market Paper.
|
| [21] |
Chen, T., L. X. Liu, W. Xiong and L. A. Zhou. 2016. “The Speculation Channel and Crowding Out Channel: Real Estate Shocks and Corporate Investment in China”, Working Paper.
|
| [22] |
Ortalo-Magné, F. and S. Rady. 2008. “Heterogeneity within Communities: A Stochastic Model with Tenure Choice”, Journal of Urban Economics, 64(1):1～17.
|
| [23] |
Mian, A., K. Rao and A. Sufi. 2013. “Household Balance Sheets, Consumption, and the Economic Slump”, Quarterly Journal of Economics, 128(4):1687～1726.
|
| [24] |
Mian, A. and A. Sufi. 2011. “House Prices, Home Equity-Based Borrowing, and the US Household Leverage Crisis”, American Economic Review, 101(5):2132～2156.
|
| [25] |
Rong, Z., W. Wang and Q. Gong. 2016. “Housing Price Appreciation, Investment Opportunity, and Firm Innovation: Evidence from China”, Journal of Housing Economics, 33∶34～58.
|
| [26] |
Sinai, T. and N. S. Souleles. 2005. “Owner-Occupied Housing as a Hedge against Rent”, Quarterly Journal of Economics, 120(2):763～789.
|
| [27] |
Wei, S. J., and X. Zhang. 2011. “The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China”, Journal of Political Economy, 119(3):511～564.
|
|
|
|
