Does subway mileage affect urban housing prices? An economic growth perspective

ABSTRACTStudying the mechanism by which urban subway construction in China increases housing prices can help deepen the understanding of the factors that rises in housing prices and may assist the government to conduct reasonable macro-control of the real estate market. This article takes unbalanced panel data from 31 major cities in China as research samples and studies the mechanism by which urban subway construction increases housing prices by influencing urban economic growth. Our findings are as follows: (1) Subway construction promotes urban economic growth, and urban economic growth, from both the demand and supply sides, increases housing prices by increasing the disposable income of urban residents and the purchase price of residential land. (2) Urban subway construction increases city land purchase prices by affecting investors' expectations of urban land development through the regulating effects of urban economic growth, which in turn increases housing prices. (3) Effective policy measures aimed at managing the speculative impact of metro construction on housing prices need to be viewed for the expectation management of housing and land speculative demand from both the demand side and the supply side.KEYWORDS: Subway constructioneconomic growthurban housing pricesmediating effectmoderating effectJEL CLASSIFICATION: R31R39R41 Disclosure statementAuthor Chenguang Hu has received research grants from the Major Projects of the National Philosophy and Social Science Fund of China. Author Daocheng Cai declares that he has no conflict of interest. Author Yuyuan Wen declares that he has no conflict of interest.Data availability statementThe data that support the findings of this study are available from the corresponding author upon reasonable request.Notes1 Xu and Tang (Citation2014) found that there was a negative long-term co-integration relationship between family disposable income and housing prices, which may be related to the level of total family disposable income rather than per capita family disposable income. This is not the focus of our discussion in this study, however, and we therefore ignore it.2 This study treats the sampled data as the population. Greene (Citation2000) and Wooldridge (Citation2000) agreed that if the research sample is a population, the fixed-effect model should be selected.Additional informationFundingThis study was supported by the Major Projects of the National Philosophy and Social Science Foundation of China [18ZDA067] and the Key project of Zhejiang Soft Science Foundation[2022C25031].