Stay Cautious in Upbeat Time: Local Leaders’ Famine Experience and Development Strategy of Housing Sector in China

(Collaborated with Linke Hou and Pinghan Liang.)

This paper shows that local officials’ personal preferences formed through early-life experience affects Chinese housing sector development. We exploit a county-level panel between 2000 and 2007 and use the Great Famine in China as a natural experiment. Our specification shows that local officials’ early-life exposure to more severe famine leads to significantly less development in the housing sector in their jurisdictions, which remain robust to alternative specifications, placebo tests, and competing hypotheses. Furthermore, we show that the early-life famine experience of local officials is negatively correlated with statistical data manipulation, indicating changing risk attitudes due to early-life famine experiences.