HOUSING INEQUALITY AND UNDERLYING FACTORS IN URBAN CHINA: A STUDY BASED ON PANEL DATA OF THE NBS SURVEY (2004–2007)

Abstract

With the market-oriented reform of the housing system since the 1ate 1980s, the housing condition in urban China has improved significantly. On the other hand, it is widely believed that the introduction of market mechanisms has led to the rise of housing inequality among urban households. Based on panel data of the NBS survey (2004–2007), this paper examines recent trends in housing inequality in urban China and analyzes the influence of the market-oriented reform and traditional institutions. By measuring the Gini coefficient of two types of housing indicators, we find that in the period from 2004 to 2007 there exists a rising trend in housing inequality among urban households. However, the rise of inequality is not simply the result of the market-oriented reform. The results of the panel analysis show that, although household income and household head income have positive effects on the probability of owning a market-price (i.e., high price) house, the probability of owning a low-price house is heavily affected by some non-income factors including household member employment sectors and Hukou (registered residence status). As a whole, both income and non-income household characteristics have effects on the probability of home ownership as well as on the house size (house floor space). It means that the rising housing inequality in urban China should be regarded as the combined result of influence from ongoing market-oriented reforms and the persisting impact of some traditional systems.