The Impact of Housing Rental Market Development on Household Consumption and Its Mechanism: Evidence from 69 Large- and Medium-Sized Cities in China

Abstract

In recent years, to address the sluggish domestic demand caused by the epidemic, consumption has declined. The General Office of the State Council has introduced a series of policy measures around the improvement and development of the housing rental market. The paper empirically investigates the influence mechanism of the development of the housing rental market on residents’ consumption using relevant data from the 2010–2019 City Statistical Yearbook and the Xi Tai database. It is found that the increase in the scale of housing rentals significantly raises the level of residents’ consumption. Specifically, the increase in the scale of housing rentals can increase government expenditure, firm up residents’ consumption confidence, and thus raise residents’ consumption level; urban labor inflow plays a negative moderating role in the development of the housing rental market to promote residents’ consumption level. The heterogeneity study shows that the improvement and development of the housing rental market in the eastern coastal region has a more significant role in promoting residents’ consumption level, while it is not significant for residents’ consumption level in the central and western regions. The study suggests that to release the vitality of residents’ consumption, government spending should be increased, the impact of inflowing labor on the labor market should be reduced, and the development of the housing rental market should be improved and nurtured.