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LAND SUPPLY AND CAPITALIZATION OF PUBLIC GOODS IN HOUSING PRICES: EVIDENCE FROM BEIJING

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  • We are grateful to the two anonymous referees and to the participants at the 2012 International Workshop on Regional, Urban, and Spatial Economics in China for useful comments and suggestions. Please direct your correspondence to ruiwang@ucla.edu.

ABSTRACT

This paper studies the extent to which spatial heterogeneity in housing prices is affected by housing supply in Beijing's specific context of centralized metropolitan government without local property tax. Taking data sets of residential land leases and private housing sales records from 2006 to 2008 within Beijing's metropolitan area, this paper examines how the capitalization of school quality and subway accessibility in housing prices varies with land availability instrumented by the employment density of state-owned enterprises (SOEs) at the beginning of SOE reform. Results confirm that the capitalization of school quality and subway accessibility is larger in supply-constrained locations.

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