Impact fees and real estate prices: evidence from 35 Chinese cities

Dong, Xiaofang and Fu, Shihe and Yuan, Yufei (2012): Impact fees and real estate prices: evidence from 35 Chinese cities. Published in: Frontiers of Economics in China , Vol. 8, No. 2 (1 March 2013): pp. 207-219.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: impact fee, real estate price, local public finance
• Subjects: H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H71 - State and Local Taxation, Subsidies, and Revenue; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R30 - General; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R31 - Housing Supply and Markets

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