An empirical study on housing price volatility and retail sales growth: Granger causality test to statistical data of Hangzhou during 2005 to 2009

The growth of total retail sales of consumer goods in a region is subject to various factors. Theoretically, housing price is one of the influential factors, but empirical study shows that the influence is uncertain in different cities. By reference to relevant literature, this paper provides the co-integration analysis and the Granger causality test of the relationship between housing price volatility and the growth of retail sales of consumer goods in Hangzhou City based on the monthly statistical data of the city from March 2005 to October 2009. The results show that, in the long term, housing price growth will drive and have a substantial impact on the growth of retail sales of consumer goods.