"Foreign Real Estate Investment and Incumbent Party Support in the United States"
Presenter: Steven Liao, Assistant Professor, Department of Political Science, University of California Riverside
Few economic issues affect people as personally and universally as housing. Yet despite the increasing globalization of housing markets, little is known about its effect on political participation. This study explores how the surge of Chinese investments in U.S. homes since 2013 shaped support for the incumbent presidential party. Existing models of material self-interests, sociotropic perceptions, or nativism suggest several competing effects given rising home prices, improved local economies, and increased immigration. To estimate the net effect, I combine a unique exogenous shock to Chinese capital outflows with original measures of ZIP codes’ attractiveness to Chinese investments. I find that areas hosting more affluent Chinese international students increased more in home prices after the shock. These areas also experienced a larger decline in incumbent vote shares. However, larger non-white populations and stronger local economies attenuate the negative political effect while home price growth has no effect, suggesting that nativist and sociotropic concerns outweigh self-interests.
Link to Paper: https://goo.gl/ZkxjsL
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