Car restriction policies and housing markets

This paper investigates the differential impacts of a unique car restriction policy - the car purchase lottery in Beijing - on the housing markets across locations within the city. I use a difference-in-differences approach to compare heterogeneous neighborhoods before and after the implementation of the policy. Housing prices experience a relative increase at locations closer to common destinations (employment centers: 0.7% per kilometer; primary schools: 3.3% per kilometer) and with better access to public transit (subways: 1.2% per kilometer; buses: 0.08% per line). These changes reflect capitalization of the car restriction policy and imply a large wealth redistribution as large as 6 years of average disposable income across homeowners. The results are relevant to policy, both in the context of unintended consequences and for efforts to develop offsetting measures.