China's COVID Policy and Wealthy Citizens' Immigration Choices

• In Event: Immigration and Migration Policies: Emerging Issues

Abstract

Objective: This study investigates the effects of China’s Dynamic Zero-COVID Policy on the immigration behavior of affluent Chinese citizens by analyzing the resulting changes in the U.S. real estate market, particularly within Chinese-dense communities.

Background: Traditional data sources present challenges in directly evaluating the policy's impact due to their opacity in China. Leveraging the Tiebout Hypothesis, this research proposes that wealthy individuals, capable of migrating to regions that align with their preferences for public goods, may induce observable shifts in real estate market dynamics post-policy implementation.

Methods: Building on preliminary GIS research, this study employs an enhanced data set including U.S. census race ratios, city-level housing price changes from Redfin, and county-level economic data from the BEA, covering a period from 2018 to 2023. A spatial difference-in-differences (DID) approach will elucidate the potential causal relationships.

Theory: The framework is grounded in Tiebout's theory that suggests migration based on public goods provision preferences and hypothesizes that:
H1: The wealthy migrate when domestic public goods do not meet their needs.
H2: Chinese immigrants prefer areas with higher Chinese community density.
H3: An influx of immigrants, influenced by policy, can disrupt real estate market equilibrium and inflate property prices.
Analysis: The study will assess the causal impact of immigration behaviors on real estate prices through a spatial DID model, incorporating robustness tests to strengthen findings.

Structure: The research will systematically cover an introduction, literature review, hypothesis articulation, methodology, data analysis, robustness testing, and a discussion of conclusions and limitations.

Potential Limitations: Challenges include discerning the true motivations behind the wealthy's migratory decisions and accounting for the intrinsic advantages of Chinese-dense communities that could confound market changes.

Conclusion: This research aims to contribute to the discourse on public policy's indirect effects on immigration patterns and real estate economics, providing insights into the decision-making processes of wealthy migrants in the face of significant public health policies.

Author

• Di Wu, UC San Diego