The Effect of Immigrants on Cities Housing Prices:A Decomposition Based on the Emigration of Local Residents

This paper uses a method to decompose the total effect of immigrants on cities housing prices into the direct demand effect and the derived demand effect which caused by local residents migration, and estimates the size of these two effects in explaining cities housing prices growth. Using 1% Population Survey of 2015 and 100 cities housing price data in China’s real estate index system, our empirical results show that the proportion of immigrants increases 1%, the urban housing price rises 0.59%, and the direct demand effect of immigrants can explain 73.9% of this total effect, the remaining 26.1% is explained by indirect effect of immigrants. Our results imply that immigrants promote cities housing prices not only by the direct demand effect, but also by indirect affect which influence the mobility of local residents, ignoring this indirect effect will underestimate the effect of immigrants on urban housing prices.