Impact Fees and Real Estate Prices: Evidence from 35 Chinese Cities

Xiaofang Dong, Shihe Fu, Yufei Yuan

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PDF(238 KB)
Front. Econ. China ›› 2013, Vol. 8 ›› Issue (2) : 207-219. DOI: 10.3868/s060-002-013-0010-3
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Impact Fees and Real Estate Prices: Evidence from 35 Chinese Cities

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Abstract

Local governments often charge developers impact fees to finance local public goods. This has been practiced in Chinese cities for more than two decades; however, no empirical studies have tested the effect of impact fees on real estate prices. Using a panel data set for 35 large- and medium-sized cities from 1998 to 2008, we find that impact fees lead to a significant increase in real estate prices. For a given city, an increase in impact fees by one yuan leads to an increase of about 5 yuan in the price of newly-built housing; a 1% increase in impact fees leads to an increase of 5 percentage points in the housing price index and 7 percentage points in the land price index.

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impact fee / real estate price / local public finance

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Xiaofang Dong, Shihe Fu, Yufei Yuan. Impact Fees and Real Estate Prices: Evidence from 35 Chinese Cities. Front Econ Chin, 2013, 8(2): 207‒219 https://doi.org/10.3868/s060-002-013-0010-3

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2014 Higher Education Press and Brill
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