Does environmental pollution affect metropolitan housing prices? Evidence from Guangzhou, China (1987-2014)

Abstract

This article sets up a new general equilibrium model cointegrating microeconomic and macroeconomic econometric models to inference the causal effect of environmental pollution on metropolitan housing prices in Guangzhou, China since the late 1980s. Empirical results show that air pollution decreased metropolitan housing prices, yet the impacts of noise and discharge of wastewater on Guangzhou housing prices are not significant. Moreover, our results show that increased expectation of variation of housing prices has a positive impact on prices.