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Home ownership as status competition: Some theory and evidence

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  • Wei, Shang-Jin
  • Zhang, Xiaobo
  • Liu, Yin

Abstract

In this paper, we explore the implications of home ownership as a status good for housing prices. More concretely, if a family's housing wealth relative to others is an important sorting variable for relative attractiveness in the marriage market, then competition for marriage partners might motivate people to pursue a bigger and more expensive house/apartment. To test the hypothesis, we explore regional variations in the sex ratio for the pre-marital age cohort across China (as a proxy for differential strength for concerns for status). We find that the evidence is consistent with the status competition hypothesis.

Suggested Citation

  • Wei, Shang-Jin & Zhang, Xiaobo & Liu, Yin, 2017. "Home ownership as status competition: Some theory and evidence," Journal of Development Economics, Elsevier, vol. 127(C), pages 169-186.
    • Handle: RePEc:eee:deveco:v:127:y:2017:i:c:p:169-186
    DOI: 10.1016/j.jdeveco.2016.12.001
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    More about this item

    Keywords

    G12; F4; O1; O53; Housing price; Price-rental ratio; Positional good; Excess men; Missing women;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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