Valuing Long-Term Property Rights with Anticipated Political Regime Shifts

• 成果类型: Article
• 署名作者: He, Zhiguo; Hu, Maggie; Wang, Zhenping; Yao, Vincent
• 署名单位: Stanford University; National Bureau of Economic Research; City University of New York (CUNY) System; Baruch College (CUNY); University System of Georgia; Georgia State University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20211242
• 发表日期: 2024
• 页码: 2701-2747
• 关键词: uncertainty; INVESTMENT; GROWTH; prices; POLICY

摘要

We identify exposure to political risk by exploiting a unique variation around land lease extension protection after 2047 in Hong Kong's housing market due to historical arrangements. Relative to properties that have been promised an extension protection, , those with unprotected leases granted by the current government are sold at a discount of 8 percent; ; those with colonial leases suffer an additional discount of 8 percent. Incorporating estimated structural parameters that suggest an additional 20 percent ground rent after 2047, , our model matches empirical discounts well across lease horizons. Discounts increase over time, , particularly in areas with greater pessimism about the city's future. ( JEL D72, G12, R31, R38) )