The spatial interrelationship between housing and land prices: Evidence from China
DOI: https://doi.org/10.3846/ijspm.2026.27467Abstract
The interrelationship between housing and land prices has long been a puzzle in China. Using a panel dataset of 286 prefecture-level cities from 2011 to 2020, we construct a spatial simultaneous-equations model and estimate it with the feasible generalized spatial three- stage least squares (FGS3SLS) approach. Results show significant mutual causality and spatial spillovers between housing and land prices. A 1% rise in local housing prices increases local land prices by about 0.71%, with a comparable effect from neighboring housing markets. Regional heterogeneity is evident: the housing-to-land price effect is strongest in western cities (0.93%) and weaker in eastern cities (0.53%), reflecting differences in local government incentives and market structures. By capturing both bidirectional causality and spatial-temporal variation, this study offers new evidence on the mechanisms linking housing and land markets and provides insights for regionally differentiated housing and land policies in China.
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spatial panel simultaneous-equations model, housing price, land price, FGS3SLS, geo-economic weights, ChinaHow to Cite
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Copyright (c) 2026 The Author(s). Published by Vilnius Gediminas Technical University.
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