From other studies we know that rising and high home prices lead to related social problems, in China and elsewhere.
Here’s a brief list: higher savings ratios, lower household consumption, reduced female labor force participation, higher marriage ages, increased inter-generational cohabitation, reduced innovation at the firm level and a crowding-out of fixed capital investment.
So far, so sub-optimal. Writing in a Discussion Paper for the Center for European Governance and Economic Development Research, Yuanwei Xu and Feichang Wang, of the Leibniz University at Hannover and the University of Gottingen respectively, wanted to see if there were health dis-benefits also associated with higher home prices?
China, where home prices have rocketed in the last two decades, is an excellent petri-dish for study. It’s also a place where the incidence of chronic disease (still well below U.S. norms) has also shot up dramatically, 2x in fact between 2000 and 2011 (I doubt it’s gone down since?).
The researchers did find a link between home prices and the rise in chronic diseases in China and, in this case literally, the devils are in the detail.
First the how. How do higher home prices affect health? There are four main transmission mechanisms:
- Increased competition in the marriage market. Too many men, not enough women. A particular problem that feeds stress into households with eligible sons as home ownership is seen in China as being a key prerequisite for marriage. Stressful for parents and anxious swains alike.
- Increased work intensity. Self evident. Higher home purchase prices require more moolah which requires more time at the grind.
- Higher mental stress. A combination of all the above.
- Reduced sleep time. More stress, kvetching parents, higher work load. Cue the later nights and earlier starts.
Now the whom. Who is most affected and at risk from this problem? Unsurprisingly it’s the first time buyers, lower income aspirants and the rural to urban migrants scrambling to get a house so they can then apply for urban hukou (those lucky enough to be home owners either by allocation or inheritance showed few signs of property-anxiety morbidity).
The conclusion for policy makers seems self-evident. Higher home prices are a boon to some but a headache, and worse, to many others. Plato’s maxim ‘In all things, moderation’ might perhaps have some utility here?
You can access the paper in full via the following link Rising Home Prices and Health in China
Happy Sunday.