Valuing the urban hukou in China: Evidence from a regression discontinuity design for housing prices

Abstract

This paper explores the demand side of hukou (household registration) acquisition in China by estimating the market valuation of urban hukou. Based on Jinan City’s acquiring the hukousby purchasinghouses policy, this paper uses houses with a floor area slightly larger and slightly smaller than the minimum required as the treatment and control groups, respectively, to implement a regression discontinuity design. The results show that residents’ willingness to pay for urban hukou in Jinan City was approximately 90,000–126,000 yuan in 2017. We also find great heterogeneity in different housing submarkets; the value of hukou is much higher in immigrant-dominated housing markets and top primary school districts. Our findings are robust to parametric and nonparametric estimates and different model specifications. We perform falsification tests by assuming a false policy introduction date and placebo tests based on rental data. Our analysis offers insights for hukou system reform and public services provision.