Title :
A Dynamic Simulation Model of Chinese Resident´s Housing Consumption and Investment Behavior
Author :
Zhi-xin, LIU ; Ling-ling, HUANG
Author_Institution :
Beihang Univ., Beijing
Abstract :
We solve a dynamic realistically model to study the character of Chinese resident´s optimal life-cycle housing consumption and investment behavior. We try to find the relationship between housing decisions and household asset allocation, and the effect of house price risk and down payment ratio. Our analysis generates a hump-shaped home ownership and housing position in age, and finds that a household may optimal choose to rent in the early of life-cycle, and sell his house or refinance a fraction of his house equity for supporting consumption other than housing at the latter stage of life-cycle. Our model also shows that investment in housing crowds out the consumption and stockholding because of illiquid home equity restrictions. The house price risk crowds out stockholding because of protective saving, while down payment ratio reduces it due to the illiquid home equity restrictions.
Keywords :
construction industry; investment; Chinese resident; dynamic simulation model; house down payment ratio; house price risk; household asset allocation; housing consumption behavior; investment behavior; Asset management; Cities and towns; Commercialization; Conference management; Engineering management; Investments; Macroeconomics; Portfolios; Protection; Statistics; consumption and investment behavior; housing; optimal; simulation;
Conference_Titel :
Management Science and Engineering, 2007. ICMSE 2007. International Conference on
Conference_Location :
Harbin
Print_ISBN :
978-7-88358-080-5
Electronic_ISBN :
978-7-88358-080-5
DOI :
10.1109/ICMSE.2007.4422180