This report attempts to investigate the relationship between birth rates and housing prices in China. The empirical literature suggested mixed results in terms of relationships between housing prices and birth rates. First, we set up a theoretical model suggesting that the relationship between birth rates and housing prices depends on other consumption expenditures (except for housing expenditure) and family wealth. Then we use a number of estimation methods to estimate the relationships between birth rates and housing prices in China from 30 provinces from 2002 to 2018. The results show that while there is a negative relationship between housing prices and birth rates in China from 2002 and 2018 in our Difference GMM model, the static model shows a positive relationship. We provide some possible explanations for these findings and conclude by presenting some policy recommendations for increasing birth rates in China.
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