nep-cna New Economics Papers
on China
Issue of 2015‒01‒09
five papers chosen by
Zheng Fang
Ohio State University

  1. Spatial Dependence in House Prices: Evidence from China¡¯s Interurban Housing Market By Yunlong Gong; Peter Boelhouwer; Jan de Haan
  2. Early Health Shocks, Intrahousehold Resource Allocation, and Child Outcomes By Junjian Yi; James J. Heckman; Junsen Zhang; Gabriella Conti
  3. Chinese urbanites and the preservation of rare species in remote parts of the country: The example of Eaglewood By Ahlheim, Michael; Frör, Oliver; Langenberger, Gerhard; Pelz, Sonna
  4. Fast-food consumption and child body mass index in China: Application of an endogenous switching regression model By Akpalu, Wisdom; Zhang, Xu
  5. FDI Spillovers in Chinese Urban Agglomerations: Comparative Analysis of the Yangtze River Delta and the Pearl River Delta By Yuyuan WEN

  1. By: Yunlong Gong; Peter Boelhouwer; Jan de Haan
    Abstract: ¡°Spatial thinking¡± is increasingly popular in housing market studies and spatial dependence across properties has been widely investigated in the intra-city housing market. The contribution of this paper is to study the spatial dependence and spillover effect of house prices from an interurban perspective, referring to the spatial interaction across local housing markets. The extensive literature study concludes that following behavior, migration and equity transfer and spatial arbitrage of capital are the main behavioral reasons for interurban spatial interaction. Using a cross-sectional data set in eastern China, our empirical results from both parametric and nonparametric approaches provide strong evidence of spatial interaction in the interurban housing market. The parametric results suggest that the spatial lag model (SAR) is the best model specification to describe the interurban house price process, indicating an endogenous interaction pattern. Ignoring such interaction effect in the house price model will produce biased coefficients estimators and misleading interpretation. In SAR model, Spillover effects of explanatory variables caused by spatial interaction are calculated by partial derivative interpretation approach and are demonstrated to have the magnitude as much as half of their direct effects. Moreover, the comparison between different spatial weighted matrices reveals that the spatial interaction depends not only on distances, but also on the economic situation of each jurisdiction. Meanwhile, nonparametric approach draws a flexible relationship between spatial dependence and geographical distances. Using spline correlogram, we find monotonically declined spatial autocorrelation of house prices and explanatory variables within larger distances, whereas the significant spatial autocorrelation of OLS residuals can only be observed at short distance (60 Km). The spillover effect, being obtained from spatial covariance decomposition, is highly significant and declines within the radius of 250 Km. All the nonparametric results imply that though the house price determinants can satisfyingly account for the interurban house prices, the importance of spillover effect cannot be neglected within certain distances. That is the neighbor¡¯s housing market situation is quite useful in predicting the house price of a particular city. This study provides a good insight into explaining why the house prices in some cities always run above the level indicated by fundamentals, and highlights the importance of cooperation between local governments in making the housing policy.
    Keywords: Spatial autocorrelation; spillover effect; interurban housing market; spatial econometrics; nonparametric estimation; China;
    JEL: R31 C21
    Date: 2014–11
  2. By: Junjian Yi (The University of Chicago); James J. Heckman (The University of Chicago); Junsen Zhang (Chinese University of Hong Kong); Gabriella Conti (University College London)
    Abstract: An open question in the literature is whether families compensate or reinforce the impact of child health shocks. Discussions usually focus on one dimension of child investment. This paper examines multiple dimensions using household survey data on Chinese child twins whose average age is 11. We find that, compared with a twin sibling who did not suffer from negative early health shocks at ages 0-3, the other twin sibling who did suffer negative health shocks received RMB 305 more in terms of health investments, but received RMB 182 less in terms of educational investments in the 12 months prior to the survey. In terms of financial transfers over all dimensions of investment, the family acts as a net equalizer in response to early health shocks for children. We estimate a human capital production function and establish that, for this sample, early health shocks negatively affect child human capital, including health, education, and socioemotional skills. Compensating investments in health as measured by BMI reduce the adverse effects of health shocks by 50%, but exacerbate the adverse impact of shocks on educational attainment by 30%.
    Keywords: early health shocks, intrahousehold resource allocation, human capital formation
    JEL: C23 D13 I12 J13
    Date: 2014–12
  3. By: Ahlheim, Michael; Frör, Oliver; Langenberger, Gerhard; Pelz, Sonna
    Abstract: Based on a Contingent Valuation study in Shanghai we assess people's willingness to contribute personally to the alleviation of environmental problems occurring in distant parts of the country. One split of our survey assessed Shanghai residents' willingness to pay for the preservation of rainforest in Yunnan, while the other split referred to the willingness to pay for the preservation of a single plant species (i.e. eaglewood) growing in this rainforest. The objectives of this study were twofold. Firstly, we wanted to find out if people living in big Chinese cities like Shanghai take an interest in the environmental problems existing in some remote parts of the country and if they are willing to contribute personally to remedy these problems. Secondly, we wanted to learn more about the motivation behind this kind of empathy, if it exists. We were especially interested in the question if this empathy refers to the specific environmental problems we addressed in our surveys or if it is motivated more by a general feeling of obligation towards environmental issues.
    Keywords: Eaglewood,rubber cultivation,biodiversity preservation,contingent valuation,ecosystem services,China
    JEL: D61 Q51 Q57
    Date: 2014
  4. By: Akpalu, Wisdom; Zhang, Xu
    Abstract: The rapid economic growth experienced within the past two decades in China highly correlates with childhood overweightness. The epidemic has become an issue of grave concern. A principal factor considered to be responsible for the epidemic in the literatu
    Keywords: child body mass index, fast-food consumption, endogenous switching regression model
    Date: 2014
  5. By: Yuyuan WEN
    Abstract: Using panel data covering 25 cities in the Yangtze River Delta (YRD) and 21 cities in the Pearl River Delta (PRD) over the 1991-2010 period, the paper applies spatial Durbin model with ML estimation techniques to examine the underlying relationship between the productivity of the host cities and FDI spillovers. The main findings are as follows. First, significant positive impacts of FDI on the local city's growth exist and increase over time, while spatial spillovers of FDI on growth present significantly but behave oppositely in YRD and PRD. Second, spatial interaction plays an important and non-negligible role in urban productivity growth; however, in the long term, YRD and PRD have significant but opposite spatial effects of growth. Third, inclusion of FDI raises the speed of conditional convergence of economic growth in YRD and PRD (for the case of single-regime). Fourth, positively spatial spillover of growth occurs in both regimes of YRD, while negatively spatial spillover for the case of PRD. The results here suggest important policy implications for the two regions to attract FDI and promote urban development.
    Keywords: FDI; spillovers; spatial Durbin model; Yangtze River Delta; Pearl River Delta
    JEL: C31 F21 F23
    Date: 2014–11

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