HOUSING CONSUMPTION IN URBAN CHINA

In this article we examine the effect of social, political, and economic factors on consumption of housing in China. First, we present income elasticities using time-series and cross-section analyses. We then compare the results for China with income elasticities for other countries as reported in the literature. Our elasticities range between 0.317 and 1.48-quite similar to the earlier studies by Houthakker in 1957 and Chow in 1985. Our estimates are also comparable with results from other countries. Based on our analysis, we found that rent reform alone cannot successfully improve the Chinese housing situation.