The nexus between labor wages and property rents in the Greater China area

Tse and Chan (2003) investigated the relationship between property sales price and the value of commuting time without accounting for the fact that property sales price is subject to the inherent limitation of containing speculative elements. A better measure to use for such a study would be the rent paid by the genuine end-user of the property. This paper examines how equilibrium rents in different locations within Greater China are determined by the time value, or the shadow wage, of an individual. Using the rental information, we provide the first estimated ratio of time values for individuals in Hong Kong, Shanghai and Taipei. Our results show that the shadow wage ratio of the households in Hong Kong, Shanghai and Taipei is about 2.25:1:1.61. •We uncover the shadow wage of individuals from their rental payment information in the greater China Area.•Our result shows that the shadow wage ratio of the households in Hong Kong, Shanghai, and Taipei is about 2.25: 1: 1.61.•Our estimated shadow wages of the Hong Kong, Shanghai and Taipei, and their ratios are consistent with the empirical data.•Our results show that the rental differential of two locations in the greater China Area is determined by the time value of an individual.