Abstract: According to the signal transmit theory and the anchoring effect theory, which is based on Behavior Economics, the price signals in land market will cause the housing price movement. High-priced land transaction is considered as containing new information, which may transmit to residential market and induce the growth of the housing price, known as the pulling effect. Using the data of 146 residential land transactions and more than one hundred thousand housing transactions in Shanghai from January 2010 to February 2016, the paper tests the pulling effect of land price signals on housing price with the difference-in-difference model. The results show that a high-premium land transaction with a premium rate of more than one provides a positive shock to the nearby housing market and results in 4.4% growth of housing price on the average. The space radiation range of the pulling effect is 3 km and the duration of the pulling effect is about 4 months. The high-priced land transaction with floor price higher than the surrounding housing prices pulls up the surrounding housing price by 6.6%. Compared with the high-premium lands, the pull effect of the high-priced land transaction has faster speed, longer duration and greater strength.

Key words: land lease market, signal transmit, difference-in-difference model, pulling effect