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Vincent Yao is the AREA Professor of Real Estate, Director of Real Estate Center and Director of the College Ph.D. Program in the Robinson College of Business at Georgia State University in Atlanta GA, USA. He is also a senior research fellow at the Federal Reserve Bank of Atlanta and a research fellow at the Hong Kong Monetary Authority. He received his BA from Renmin University of China and Ph.D. in Economics from State University of New York at Albany.
His current research interests are household finance, real estate finance, and housing policies. His papers have been published in the American Economic Review, Journal of Financial Economics, Management Science, Journal of Urban Economics and Real Estate Economics etc.
Secure and complete property rights are considered a key determinant of long-term economic growth. We exploit a unique feature of residential housing markets in China, where dual property rights coexist due to dual land ownership originally in the constitution, that is, urban land belongs to the state whereas rural land is collectively owned. The dual property rights for otherwise identical properties differ in market liquidity, collateralization opportunities, and uncertainty associated with future disposition. We estimate the relative cash and service flows of limited property rights to be 61-72 percent. We also study the effect of a municipal zoning change as a policy experiment that unexpectedly reduces the uncertainty and frictions for LPR, but not so much for FPR units. Our results suggest that the new regulation recovers 9 percent of the service ow discount on average, but it can be as high as 7 times for some sellers. The lower uncertainty also leads to significant reduction of speculative activities measured by turnover rates and price volatility. Our estimates indicate that weak property rights protection accounts for a significant portion of rapid appreciation in China, and government can design policies to improve both individual and market outcomes.