Privatization of public housing : did it cause the 1998 recession in Hong Kong?

Research output: Journal PublicationsJournal Article (refereed)

7 Citations (Scopus)

Abstract

This paper finds evidence that a public housing privatization program produced adverse effects on housing transactions and the economy in Hong Kong. A Granger causality test shows that house prices drive housing transactions, lending support to the hypothesis that an increase or decrease in prices at the lower end of the market sends ripple effects throughout the whole market. A scheme announced in December 1997, offering tenants an opportunity to buy their units at deeply discounted prices, reduced public housing tenants’ bids for private homes and thus the equity of homeowners. The hypothesis is supported by evidence indicating a structural break in the housing price relationship at the time the privatization program is introduced. Declines in housing prices further eroded employment and set off a vicious circle.
Original languageEnglish
Pages (from-to)262-273
Number of pages12
JournalContemporary Economic Policy
Volume24
Issue number2
DOIs
Publication statusPublished - 1 Apr 2006

Fingerprint

public housing
recession
privatization
Hong Kong
housing
cause
transaction
private home
homeowner
market
lending
causality
evidence
equity
Public housing
Housing prices
Recession
Privatization
economy
Granger causality test

Cite this

@article{fd6c928ea0f84957a9a7adad144bfe46,
title = "Privatization of public housing : did it cause the 1998 recession in Hong Kong?",
abstract = "This paper finds evidence that a public housing privatization program produced adverse effects on housing transactions and the economy in Hong Kong. A Granger causality test shows that house prices drive housing transactions, lending support to the hypothesis that an increase or decrease in prices at the lower end of the market sends ripple effects throughout the whole market. A scheme announced in December 1997, offering tenants an opportunity to buy their units at deeply discounted prices, reduced public housing tenants’ bids for private homes and thus the equity of homeowners. The hypothesis is supported by evidence indicating a structural break in the housing price relationship at the time the privatization program is introduced. Declines in housing prices further eroded employment and set off a vicious circle.",
author = "HO, {Lok Sang} and WONG, {Wai Chung, Gary}",
year = "2006",
month = "4",
day = "1",
doi = "10.1093/cep/byj017",
language = "English",
volume = "24",
pages = "262--273",
journal = "Contemporary Economic Policy",
issn = "1074-3529",
publisher = "Wiley-Blackwell Publishing Ltd",
number = "2",

}

Privatization of public housing : did it cause the 1998 recession in Hong Kong? / HO, Lok Sang; WONG, Wai Chung, Gary.

In: Contemporary Economic Policy, Vol. 24, No. 2, 01.04.2006, p. 262-273.

Research output: Journal PublicationsJournal Article (refereed)

TY - JOUR

T1 - Privatization of public housing : did it cause the 1998 recession in Hong Kong?

AU - HO, Lok Sang

AU - WONG, Wai Chung, Gary

PY - 2006/4/1

Y1 - 2006/4/1

N2 - This paper finds evidence that a public housing privatization program produced adverse effects on housing transactions and the economy in Hong Kong. A Granger causality test shows that house prices drive housing transactions, lending support to the hypothesis that an increase or decrease in prices at the lower end of the market sends ripple effects throughout the whole market. A scheme announced in December 1997, offering tenants an opportunity to buy their units at deeply discounted prices, reduced public housing tenants’ bids for private homes and thus the equity of homeowners. The hypothesis is supported by evidence indicating a structural break in the housing price relationship at the time the privatization program is introduced. Declines in housing prices further eroded employment and set off a vicious circle.

AB - This paper finds evidence that a public housing privatization program produced adverse effects on housing transactions and the economy in Hong Kong. A Granger causality test shows that house prices drive housing transactions, lending support to the hypothesis that an increase or decrease in prices at the lower end of the market sends ripple effects throughout the whole market. A scheme announced in December 1997, offering tenants an opportunity to buy their units at deeply discounted prices, reduced public housing tenants’ bids for private homes and thus the equity of homeowners. The hypothesis is supported by evidence indicating a structural break in the housing price relationship at the time the privatization program is introduced. Declines in housing prices further eroded employment and set off a vicious circle.

UR - http://commons.ln.edu.hk/sw_master/375

U2 - 10.1093/cep/byj017

DO - 10.1093/cep/byj017

M3 - Journal Article (refereed)

VL - 24

SP - 262

EP - 273

JO - Contemporary Economic Policy

JF - Contemporary Economic Policy

SN - 1074-3529

IS - 2

ER -