The Gradients of Power: Evidence from the Chinese Housing Market / Hanming Fang, Quanlin Gu, Li-An Zhou.

Format:

Book

Author/Creator:

Fang, Hanming.

Contributor:

National Bureau of Economic Research.

Gu, Quanlin.

Zhou, Li-An.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20317.

NBER working paper series no. w20317

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Gradients of Power

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

Using a large, unique dataset on the Chinese housing market, we propose to measure corruption using the price differences paid by bureaucrat buyers and non-bureaucrat buyers in the housing market. We find that the housing price paid by bureaucrat buyers is on average 1.05 percentage points lower than non-bureaucrat buyers, after controlling for a full set of characteristics of buyers, houses and mortgage loans. More interestingly, we find that the bureaucrat price discounts exhibit interesting gradients with respect to their hierarchical ranks, the criticality of their government agencies to real estate developers, and geography. We argue that the bureaucrat price discounts and the gradients of these discounts are unlikely to be driven by alternative explanations, thus they are evidence of corruption and measures of the market value of government power.

Notes:

Print version record

July 2014.