Are Princelings Truly Busted? Evaluating Transaction Discounts in China's Land Market

Abstract

This paper replicates Chen and Kung's 2019 analysis ($The$ $Quarterly$ $Journal$ $of$ $Economics$ 134(1): 185-226). Inspecting the data reveals that nearly one-third of transactions (388,903 out of 1,208,621) are perfect duplicates of other rows, excluding the transaction number. The analysis on the data sans duplicates replicates their statistically significant princeling effect, robust across various specifications. Further analysis reveals a disagreement between Chen and Kung's text and code: the paper's ''logarithm of area'' is actually area ($\text{m}^2$) divided by one million. This therefore necessitates a reinterpretation of the estimation results, revealing that the princeling effect is extremely large.