Does the tender, auction and listing system in land promote higher housing prices in China?

Using monthly data on national housing prices from July 1998 to June 2015, we investigate the effect of the Tender, Auction and Listing' (hereafter TAL) system on housing prices in land, implemented on 31 August 2004. We apply the additional polynomial regression discontinuity method which effectively eliminates the effects of several confounding factors such as financial crisis, New National Ten Provisions' and 9.30 New Regime'. We find that, although the TAL has caused the national average housing prices to go up by 10%, accounting for 11% of total increase in housing prices in the last year, it does not constitute the major driver for housing prices. Furthermore, our results indicate that TAL has exerted a larger impact on commercial and residential properties, especially in the middle and west regions. By examining the transmission mechanisms, we find that the effects of TAL are mainly via government's starvation-style land supply effect and market-reshuffling effect.