The Impact of Housing Demolition on Residents’ Happiness: Empirical Evidence from China

The subjective welfare effect of housing demolition has not received enough attention in existing literature, even though more than 100 million people have participated in housing demolition projects in China in the last decades. This study examined the relationship between housing demolition and residents’ happiness using data from the China Family Panel Studies. Based on the OLS model and the staggered DID model, we found that housing demolition can significantly enhance Chinese residents’ happiness, especially for those residents with non-agricultural livelihood strategies before the demolition. However, this salient positive relationship was not observed for residents dominated by agricultural livelihood strategies. In addition, we also found a time effect in the relationship we are concerned about. That is, if demolition happened in the past four to nine years, then the enhancement effect of housing demolition on happiness may “disappear,” while the effect remains salient in other cases, resulting in an “N-shaped” change in demolition residents’ happiness with the demolition time. The findings of this study provide new empirical evidence for understanding the relationship between residential relocation and individual subjective welfare in developing countries. And it suggests that China’s policymakers should pay more attention to improving the lives of vulnerable groups in housing demolition projects.