The Demand for Space in China
40 Pages Posted: 30 Dec 2013 Last revised: 17 Oct 2015
Date Written: June 2015
We review the evolution of housing policy in the People’s Republic of China as the government has, over the past 60 plus years, shifted the provision of housing services from a market system, to a planned system, and back again. Using data from the 1991 to 2006 Chinese Health and Nutrition Surveys, we estimate that, in China’s renewed market phase, the own-price and income elasticities of the demand for habitable space are -.46 and .45, respectively. Absent information on the price of amenities, our data cannot inform us about the role of the price of amenities on the demands for amenities or housing services. However, even absent the price of amenities, our estimates indicate that the permanent income elasticity of housing services demand in China is .72 and the elasticity of housing services demand with respect to the price of space is -.57.
Keywords: Housing, China
JEL Classification: R31, P36, O53
Suggested Citation: Suggested Citation