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Energies 2018, 11(7), 1847; https://doi.org/10.3390/en11071847

Energy Prices, Real Estate Sales and Industrial Output in China

1
and
1,2,*
1
Ronald Coase Centre for Property Rights Research, The University of Hong Kong, Pokfulam Road, Hong Kong, China
2
School of Tourism and Economic Management, Chengdu University, Chengdu 610106, China
*
Author to whom correspondence should be addressed.
Received: 9 May 2018 / Revised: 28 June 2018 / Accepted: 5 July 2018 / Published: 14 July 2018
(This article belongs to the Special Issue Building Energy Use: Modeling and Analysis)
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Abstract

A majority of energy is consumed to control the indoor environment for human activities and industrial production. The demand for energies for these two uses are reflected in demand for different types of real estate and the volume of industrial outputs. The purpose of this study is to examine the long-run equilibrium and short-run dynamics between real energy prices and demand for different types of real estate and industrial output in China. Energy prices are measured in the real price of fuels and power. Demand for different types of real estate is measured in their sales volume in the first hand market, that is, floor areas of new real estate sold by developers. Industrial output is measured by the net output (value added) of the industrial sector. All data series were tested for stationarity (i.e., the existence of a unit root) before testing for a co-integration relationship. We found no long-term equilibrium relationship between energy prices and the demand for real estate and industrial output as predicted by theory, probably due to increased supply of energy efficient buildings. There is also no short-run relationship between energy prices and demand for housing due to the increase in vacancy rate resulting from speculative demand for housing. However, demand for commercial properties appeared to lead energy prices. Finally, there is strong evidence suggesting that an increase in energy prices will significantly reduce industrial output but not vice versa. View Full-Text
Keywords: building energy; cointegration; energy price; real estate sales; industrial value added; break date building energy; cointegration; energy price; real estate sales; industrial value added; break date
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Chau, K.W.; Zou, G. Energy Prices, Real Estate Sales and Industrial Output in China. Energies 2018, 11, 1847.

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