Impact of excessive housing price on individual value: evidence from China

Abstract

This paper investigates the impact of soaring house prices on personal values, focusing on the case of China using data from The China Family Panel Studies (CFPS). Employing the Difference-in-Differences (DID) method to address endogeneity concerns, the study examines how escalating house prices influence individual values. By combining empirical analysis with theoretical insights from behavioral economics, the research reveals that rising house prices lead individuals to undervalue the importance of hard work while prioritizing social relationships. This shift in values not only affects economic behavior but also has broader implications for long-term economic and social development. The findings underscore the need for government interventions to stabilize housing prices and foster sustainable social and economic development. Overall, this research contributes to a deeper understanding of the multifaceted impact of soaring house prices on individual values and societal well-being.