Fiscal Decentralization,Local Government Competition and House Price Fluctuation:An Empirical Analysis of 35 Large and Medium-sized Cities in China

Abstract

By using the panel data of house price and the economic fundamentals of 35 cities in China from 1999 to 2008,the paper studies the interactions between house price,fiscal decentralization and local government competition.The empirical analysis shows that fiscal decentralization and local government competition have significantly positive influence on house price,and the influence of fiscal decentralization is different between regions.To realize rational house price growth,financial management system of the local government should be sound,the land finance should be regulated,the proportion of the local government fiscal revenue should be increased and the assessing system of the local government official achievements should be established.