| dc.description.abstract | This study aims to investigate and analyze how the luxury tax started in 2011 affects housing prices in Taiwan. In particular, we are interested to understand whether the implementation of the luxury tax leads to a deflating effect on house prices. Under the framework of regression analysis, this thesis uses the data of the Lutheran Housing index from 1998Q1 to 2012Q3, covering the areas of Taipei, New Taipei, Taichung, Kaohsiung and Taiwan cities. We also study the effect of macroeconomic variables on house prices.
We have the following conclusions from the empirical results:
I. Within the framework of regression analysis, the results of join test show that, the luxury tax has no negative effect on house prices, as expected by the government. The levy of the luxury tax only makes the up-trend in prices slow down. In particular, there is no effect on house prices in the area of Taichung and Kaohsiung, and the house prices stay moving up in areas of Taipei and New Taipei after the implementation of the luxury tax. In average, the house prices in Taiwan keep rising after the implementation of the luxury tax.
II. Among all macroeconomic variables considered in this analysis, stock market index and interest rates have the most significant explanatory power for the change in house prices.
III. The other macroeconomic variables we consider, including the consumer confidence index, inflation rate, per capita income, the number of building permits issued, and the money supply, are not significantly related to house prices in Taiwan. | en_US |