Real Estate Investment, Loan Preference, and National Happiness: Evidence from China

Abstract

With two-stage least squares and LS models, this paper investigates the effects of real estate investment and loan preference on national happiness with data of 31 provinces in China from 2000 to 2018. The conclusions are that a rapid growth of real estate investment has significant adverse effects on national happiness in modern China. Specifically, real estate investment has negative impacts on disposable income, consumption structure, and personal development. Moreover, the rapid growth of real estate investment and institutions’ loan preference leads to other inhibitory effects on national happiness. The intermediary effect model confirms the transmission mechanism of the rapid growth of real estate investment, the loan structure, and national happiness. According to our research, we propose conductive suggestions for the governments.

The Relationship Between Individuals’ Expenditure and the Happiness Index Level in China

“…China National Happiness continued to fall from 1990 to 2012 which was the period that the government encouraged real estate investment. The writer suggested curbing spectacular investment via loan preference, taxation on real estate, and making the housing back to its residential nature, then eliminating the inhibitory effect of real estate on national happiness [4]. Zhao determined the relationship between income, health, and residents' wellbeing using the province Taiyuan in China as an example, that both factors have a positive relationship with the happiness of individuals either directly or indirectly.…”

The Effect of Urban Resilience on Residents’ Subjective Happiness: Evidence from China

“…In the report of the 19th National Congress, the importance of people's happiness and sense of security was emphasized, and it was pointed out that the public service system should be improved, and social justice should be promoted to reach the above goal. Recent subjective happiness literature in China has mostly been concerned about the role of hukou status, environmental quality, housing characteristics, housing prices, or income, while explanations of the power of the above factors have been relatively limited [6][7][8][9]. Further research is needed to analyze why there is a difference in residents' subjective happiness in different cities.…”

Happiness and Economic Choice

“…Happiness has been recognized as one of the main factors to explain numerous economic phenomena: happiness is important in enabling the willingness to pay (Silva et al, 2019); it can affect investment behavior (Ke and Lu, 2021;Brahmana et al, 2012); it can affect financial decisions (Delis and Mylonidis, 2015;Shefrin, 2008); it can be a crucial component of utility (Blanchflower, 2021). Happiness is also found to be a fundamental driving factor in consumption.…”