Population Aging, Household Savings and Asset Prices: A Study Based on Urban Commercial Housing Prices

Currently, China's aging population, high savings rate and high housing asset prices coexist, which has become a hot issue in academic research. First, considering the life-cycle hypothesis and overlapping generations model, asset prices are negatively correlated with the population dependency ratio and positively correlated with household savings. Second, based on census data from prefecture-level cities, a pooled regression model and two-stage least squares (2SLS) are used in this empirical research. The child dependency ratio was found to have a significant negative impact on housing prices, while the elderly dependency ratio had a positive impact on housing prices. The positive relationship between household savings and housing prices is highly significant. Finally, the interaction analysis shows that the impact of population aging on housing prices differs under different levels of household savings; thus, population aging affects housing prices through household savings, and the mediator dilutes and weakens this impact. The elderly generation's release of savings could gradually inhibit housing prices. Population aging causes long-run downside risks but not a market meltdown.