PREFABRICATED HOUSING SUBSIDY ANALYSIS IN CHINA BASED ON AN EVOLUTIONARY GAME MODEL

Kaicheng Shen,Zhihui Zhang,Xinying Cao,Xiaodong Li

doi:10.3846/jcem.2021.15610

Kaicheng Shen, Zhihui Zhang + Show 2 more

Open Access

https://doi.org/10.3846/jcem.2021.15610

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Abstract

Prefabricated housing and cast-in-site housing are two alternatives for selection by developers and customers. The government, as the policy maker, creates incentive policies to encourage developers and customers to choose prefabricated housing. This paper aims to analyze the subsidy mechanism to theoretically confirm the subsidies’ scopes, amounts and end times through an evolutionary game model and simulation. In the game model, government subsidies affect the interactions between developers and customers in the decision-making process. The findings are as follows: 1) The developer housing subsidy can lower the housing price, while the customer housing subsidy can increase the price; 2) The government should first offer the developers a larger subsidy amount during the early development stage and then offer the customers a smaller subsidy amount later; 3) The government should determine the end time based on the proportion of developers and customers who choose prefabricated housing; 4) A higher prefabrication ratio may not always improve the development of prefabricated housing, and there is an optimal production scale that creates the best development situation. The empirical analysis shows that this model can help the government develop reasonable and optimal subsidy policies within the limit of budget to stimulate developers and customers.

Highlights

Prefabricated housing (PH) and cast-in-site housing (CH) are two alternatives for developers and customers
The game model of government subsidies in this study reinforces our understanding of the breadth and depth of hidden concerns in terms of the objects, scopes, amounts, boundaries and end times of these subsidies and the influences on developers’ and customers’ transactions and decisions
This research contributes to the development of PH and can help the government quantitatively confirm the scopes, boundaries, amounts and end times to develop reasonable incentive policies based on this game model

Summary

Introduction

Prefabricated housing (PH) and cast-in-site housing (CH) are two alternatives for developers and customers. PH is built using a construction method with a factory-produced prefabricated component, standardized design and mechanized manufacturing process (Xu & Chen, 2010). Cast-in-site construction requires all the processes to be completed on site. Developers and customers have the right to decide which kind of housing they want, and their decisions form the housing market. Developers focus on the costs and benefits, e.g., labor costs, technology, environment, reputation. The government, as the policy maker, adjusts the market via certain policy measures

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