Housing-Choice Hindrances and Urban Spatial Structure: Evidence from Matched Location and Location-Preference Data in Chinese Cities

Posted: 11 Nov 2019

See all articles by Siqi Zheng

Siqi Zheng

Massachusetts Institute of Technology (MIT) - Center for Real Estate; Massachusetts Institute of Technology (MIT) - Department of Urban Studies & Planning; Hang Lung Center for Real Estate, Tsinghua University

Yuming Fu

National University of Singapore

Hongyu Liu

Tsinghua University - Institute of Real Estate Studies

Date Written: October 30, 2019

Abstract

In a monocentric city with a well-functioning residential market, Pareto-efficient spatial equilibrium entails the sorting of residents according to their bid–rent gradient in descending order away from city center. Violation of this sorting condition creates opportunities for Pareto-improving trading of locations and can be sustained only if the market is hindered. We propose a simple ordered-location-choice model using matched location and location-preference data of individual households to examine violations of the Pareto-efficient spatial sorting condition. In so doing we are able to identify population groups facing housing-choice hindrances. We find in a sample of Chinese cities undergoing housing market liberalization that poor marketability of the previously state-provided homes, inadequate provision of housing finance, and spatial mismatch between job-market and housing-market opportunities contribute to a Pareto-inefficient spatial structure.

Suggested Citation

Zheng, Siqi and Fu, Yuming and Liu, Hongyu, Housing-Choice Hindrances and Urban Spatial Structure: Evidence from Matched Location and Location-Preference Data in Chinese Cities (October 30, 2019). Available at SSRN: https://ssrn.com/abstract=3478287

Siqi Zheng

Massachusetts Institute of Technology (MIT) - Center for Real Estate ( email )

Building 9-323
Cambridge, MA 02139
United States

HOME PAGE: http://https://siqizheng.mit.edu/

Massachusetts Institute of Technology (MIT) - Department of Urban Studies & Planning ( email )

77 Massachusetts Avenue
Cambridge, MA 02139
United States

Hang Lung Center for Real Estate, Tsinghua University ( email )

HeShanHeng Building
Beijing, 100084
China

HOME PAGE: http://https://siqizheng.mit.edu/

Yuming Fu (Contact Author)

National University of Singapore ( email )

4 Architecture Drive
Department of Real Estate
Singapore, 117566
Singapore
(65) 6874 7100 (Phone)
(65) 6774 8684 (Fax)

HOME PAGE: http://profile.nus.edu.sg/sde/rstfuym

Hongyu Liu

Tsinghua University - Institute of Real Estate Studies ( email )

School of Civil Engineering
Beijing, 100084
China
8610-62795115 (Phone)
8610-62788678 (Fax)

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