The Granger Causality Relationship between the Housing Price and the Land Price in China

摘要

As a result of rapid economic growth and urbanization, demand for urban land and new dwellings have increased accordingly, leading to the sustained growth of housing prices. Housing price in China has been rising rapidly, which makes buying an own house a big burden for ordinary people. To prevent rapid rising of housing price, government has initiated many policies and regulations which proved not so effective as estimated in controlling housing price This paper intends to describe the relationship between land use policy and residential housing market. The interactions between housing price and land price are examined, based on Granger causality analysis. Augmented Dicky Fuller (ADF) test is used to study the integration of these time series and the cointegration relations between housing price and land price. Then the author analyzes the Granger causality relation betweens housing price and land price The result of this paper will help policy maker in China to make correct land regulations.