City size and housing purchase intention: Evidence from rural-urban migrants in China

Despite the increased focus on housing choices among rural-urban migrants in China, there is a lack of studies on city size and housing purchase preferences. In this paper, we extend the conceptual framework of the Rosen-Roback model to analyse how city size affects rural-urban migrants' housing purchase intention, and find that the impact of city size on the willingness to buy a house in the host city for migrants has an inverted U shape by using the China Migrants Dynamic Survey of 2014. To explain this phenomenon, we further adopt the Oaxaca-Blinder decomposition, which shows that rural-urban migrants have achieved a spatial equilibrium between housing costs and city amenities in large cities, compared with megacities and small cities. Specifically, the amenities in large cities can compensate for the negative impact of the high housing cost, making these large cities more attractive than small ones for rural-urban migrants, while rural migrants have to bear high housing prices and exclusive urban welfare because of the strict household registration system in megacities. This study thus sheds new light on the adoption of diversified housing policies to solve the housing problems of rural-urban migrants in China by considering city size.