Research on the Measurement of China’s Adjusted House Price Index

Abstract

In China, the national statistical office provides flow type house price index which is the price of periodical housing trade but, in most developed countries, the adjusted house price index is preferred which is the stock type price index and reflect the value of all houses rather than new houses. Although, in the long run, the flow type house price index converges to real value of all houses, due to the rapid development of Chinese economy in the past decade, the flow type price index is significantly biased in reflecting the value of all houses. This paper firstly summarizes the background and method of adjusted house price index. Then, based on the particular situations of China, a more appropriate method is developed. Given on the available statistics, China’s national and provincial adjusted house price indices are calculated and discussed.