1. Explaining Housing Choice in Mega-cities of China Prof John Ma (Director) Dr. Wang Jianping Guowei Zhou Haixian Wang Center for Demography and Sustainable Development Division of Social Science Division Hong Kong University of Science and Technology Present at the International Conference on China’s Urban Land and Housing in the 21 st Century, 2007.12.13, HK Baptist University Support from NSC06/07.HSS01

2. Background in the early 2000s Four mega-cities: SH, SZ, BJ, GZ  Dual housing systems  Booming housing markets and soaring price  Housing/Education/Medicare as 3 “big mountains” Is the market going crazy? From a family perspective, we try to explain  Who are like to own?  How much they would pay?  How big is the space?

3. Literature Review: three approaches Utility maximization: A. Housing as consumption or investment (Plaut, 1987) Income/ asset price/ relative price B. Changing in housing market (Deurloo et al., 1994) Inflation/ mortgage rate/ change in housing price Life-course: Household changes (age, family size, composition) triggered by marriage, births, changing workplace, retirement result in changes in the housing market (Rossi, 1955, Clark etc. 1996) Mixed model in a transitional economy: Dual housing systems (Li, 2000a,2000b; Fu,2000; Huang and Clark,2002) A. growing private ownership and housing markets B. persistence of the redistribution system with subsidized housing Resident A better off than Resident B

4. Two-level Conceptual Framework: OPS Ownership Housing Payment Housing Area Housing Quality Upper level: Ownership (O) Lower level: Housing Payment (P) Housing Size (S)

5. Data: 2005 National Population Survey in China Sample: Guangzhou, Shenzhen, Shanghai, Beijing (2~3%)  male only  20-49 years old  local city residents  sample size: 17,914 Household and housing information  Housing ownership: parental home / own / rent / collective hshd  Floor area (m 2 )  Year of construction  Location (inner city / suburban area)  Total housing payment (1,000 RMB)  Family size Information contained in individual records  Individual’s education, income, age, years since 1st marriage  Work unit type : pub & SOE, proprietor, private E, others

6. House Living Arrangement by Age and Years since 1st Marriage

7. House Living Arrangement by Income and Education

8. House Living Arrangement by Unit Type and Location

9. Note: *** p<0.01 Explain Housing

10. Main findings and discussion Strong income enhancing effect on OPS Strong enhancing effect of univ. education on OP but not so on S Positive and declining effects of age/marriage on OS Work Unit Type: O:Public sector > private sector P:Public sector < private sector S: Public sector < private sector Overall trend: bigger and better Implication:  Trend is likely to be sustained by increasing family income and education and HS functions as consumption, insurance and investment  Declining importance of redistribution system as private sector is growing  Better policy to be formulated for healthy housing markets