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on China |
| By: | Xuan Huang; Bruno Lanz |
| Abstract: | Using a dual-market sorting model of workers' location decisions, this paper studies the capitalization of air pollution in wages and property prices across Chinese cities. To account for endogeneity of air pollution in the determination of wages and property prices, we exploit quasi-experimental variations in air quality induced by a policy subsidizing coal-based winter heating in northern China, and document a discontinuity in average air quality for cities located north and south of the policy boundary. Using data for all 288 Chinese cities in 2011, we estimate an equilibrium relationship between wages and house prices for the entire system of Chinese cities, and specify a regression discontinuity design to quantify how variation in air quality induced by the policy affects this relationship locally. Our preferred estimates of the elasticity of wages and house prices with respect to PM10 concentration are 0.53 and -0.71 respectively. At the average of our sample, the willingness to pay for a marginal reduction in PM10 concentration is CNY 261.28 (about USD 40.50), with a significant share reflected in labor market outcomes. |
| Keywords: | Hedonic model; Air pollution; Labor market; House prices; Local public goods; Regression discontinuity |
| JEL: | H41 J31 R31 Q53 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:17-10&r=cna |
| By: | Yixiao Zhou; Rod Tyers |
| Abstract: | In transitional economies like China, comparatively low real wages imply sub-OECD labor and skill shares of value added and comparatively high capital shares. Despite rapid real wage growth, however, rather than converge toward the OECD, China’s low-skill labor share has been falling, due to structural and technical change. Here this dependence is quantified using an elemental national model with three households. Since 1994, a third of the total change in the Gini coefficient is estimated to be due to structural change and the rest to mainly skill-biased technical change. Widely anticipated further twists away from low-skill labor toward capital are then examined, assuming downward rigidity of low-skill wages and transfers that sustain low-skill welfare via taxes on capital income. The potential is identified for unemployment to rise extraordinarily, with negative effects mitigated if the population declines or if the share twists are accompanied by very strong total factor productivity growth. |
| Keywords: | Automation, income distribution, tax, transfers, general equilibrium, China |
| JEL: | D33 D58 O33 O53 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2017-59&r=cna |
| By: | Akira Tanaka; Xiaochun Huang |
| Abstract: | This paper was originally presented at the 1stWorld Congress on Business History/ This study aims to describe historical trends in the “mass-procurement system” for iron ore, which for many years has been the largest non-fuel natural resource in terms of trade value. Wefocus on China because it reflects globaltrendsmost comprehensively. Throughmodern history, all large steel producers have established their own iron ore mass-procurement systems. We can classify thesesystemsinto three major modes:“captive mine”,“long-term contract (LTC)”,and “spot trading.” We found that in China, traditional state-owned steel companies such as Anshan Iron and Steel (Ansteel)adopted the captive-mine mode from the prewar period, like the Americans. On the other hand, the newly established leadingcompany Baoshan Iron and Steel (Baosteel) introduced the LTC mode, following the innovationof this mode by Japanese companies in the 1980s. Then, in the early twenty-first century, China’smass-procurement system for iron ore further diversifiedwhich establishedthe spot-trading mode as the third mass-procurement system. As a result, many steel companies tended to create a portfolio of sourcing modes. |
| Keywords: | Iron ore, China, Steel industry, Outsourcing |
| JEL: | F50 N55 N65 N85 Q37 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-17-005&r=cna |
| By: | Xiaochun Huang; Akira Tanaka |
| Abstract: | The iron ore trading system underwent a transformation in 2010. Until then,long-term contracts dominated the trade and the FOB price was determinedthroughnegotiationsbetween supplierand buyer, with the agreed price applied the following year. This system was changed in 2010 to aquarterly index-linked pricingin which the CFR price was applied. Some studies have suggested that the intervention of the Chinese government was the reason for this change, but this study concludesthat it was thebargaining betweensuppliersand purchasers thatresulted in this transformation. |
| Keywords: | Long-term contract, spot trading, iron ore price index, the Big Three, China Iron and Steel Association(CISA), dispersed industrial organization, state intervention |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-17-006&r=cna |