Yilin Hou, professor of public administration and international affairs, won a joint best research award from the Deng Ziji Foundation and the Journal of Trade and Finance Economics in China for a co-authored paper published in the journal in 2017. The award is named after a distinguished late public finance economist in China, life-long professor at Xiamen University (Chancellor Syverud and Vice President for Research John Liu just paid a visit to the University in early May).

The paper is titled “Public Service Capitalization and House Value: Empirical Analysis of Sales Data and School Reputation in Beijing.” Though there has been much talk in China about the property tax, there has yet no thorough empirical analysis about why China should levy a broad-base real property tax. This paper answers that question from the perspective of value capture of public services via real property price, using data of second-hand housing in Beijing and reputation of elementary schools that match these homes. Results show that the unit housing price in top tier school attendance zones is 30% higher than that in bottom tier zones. The paper also uses the mid-2014 strictly implemented “attendance by proximity” policy as a shock to empirically test its outcome. Results show that house value in middle tier school zones increased by 5% with the policy shock. The paper provides evidence to advocate for a broad-base property tax in order to capture the capitalized value arising from improved public services.

This is Hou's second award for work he conducted with his team to advocate levying a real property tax in China. His first award (December 2018) was from the Pu Shan Foundation for his co-authored paper on developing an ability-to-pay index that came out in the journal Economic Research in 2016.

08/22/19