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Research Seminars & Workshops @ IRES


PHD Candidate Xin Zhang
Engineering Systems Division (ESD) at MIT

Using System Dynamics Approach to Analyze China’s Urban Housing Market


Date:

05 Mar 2015 (Thu)

Time:

3.00 - 4.30pm

Venue:

RMI Executive Seminar Room 21 Heng Mui Keng Terrace, I3 Building, Level 4


Abstract

This research develops a model of the dynamics of China’s urban housing market that accounts for the particular way land is controlled and sold. It has two special features. First, it uses the system dynamics (SD) technique to focus on the dynamic features of the system, especially the potential virtuous and vicious cycles that can accelerate and rapidly burst market bubbles. Second, it expands on the traditional urban economic approaches (such as the DiPasquale-Wheaton (D-W) model) to incorporate features that do not exist in conventional markets where market economy dominates, such as in the United States and Europe. The research develops an approach to explore situations, as in China and also elsewhere such as Singapore, where political economy and other non-conventional characteristics play a predominant role. Overall, the research develops a template, a canonical model, for exploring such markets. Specifically, the research seeks to demonstrate this approach through a particular case. Building upon the proven model for market economies, the new SD model incorporates important special features such as “land financing scheme" of the current Chinese market. It is then used to analyze potential dysfunctional features of the current housing market in China, and to suggest policy implications for possible corrective actions.

About the Speaker

Xin Zhang is currently a PhD candidate in the Engineering Systems Division (ESD) at MIT. His research, under the supervision of Profs David Geltner and Richard de Neufville, concentrates on the modeling of the Chinese urban housing market, and flexibility design in new city developments in Asian countries. In 2013, he was a researcher at the China Development Bank and worked on the initiation of an innovative financing structure to replace the existing land-sale financing scheme at the Chinese local governments level. In 2012, He was a researcher at Singapore University of Technology and Design (SUTD) and served as consultant to Keppel Corporation of Singapore, working on the adoption of flexibility design for new eco-city development in Tianjin, China. Zhang has received an MIT graduate teaching certificate and has been teaching assistant for multiple graduate level courses at MIT. Prior to joining the PhD program at MIT, he was the co-founder of ORBIS Real Estate Consulting focusing on purchasing commercial real estate mortgages for life insurance companies. From 2006 to 2008, Zhang obtained three masters degrees in civil engineering (transportation), city planning, and real estate development, all from MIT. Zhang also has a Diplôme d'ingénieur from Ecole des Mines de Paris.

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