IDEAS home Printed from https://ideas.repec.org/a/eee/jhouse/v45y2019ic3.html
   My bibliography  Save this article

Does housing unaffordability crowd out elites in Chinese superstar cities?

Author

Listed:
  • Chen, Jie
  • Hu, Mingzhi
  • Lin, Zhenguo

Abstract

With prices soaring in Chinese superstar cities (i.e., Beijing, Shanghai, Guangzhou and Shenzhen), housing is becoming increasingly unaffordable. This paper investigates whether housing unaffordability crowds out elites in Chinese superstar cities. Using both micro- and macro-level data from China's Urban Household Survey and China Statistical Yearbook for Regional Economy, we find that, in general, elites still prefer superstar cities. However, there is evidence that the attractiveness of superstar cities has declined over time. In addition, we find that the next-tier cities (i.e., alternative cities) become increasingly attractive to elites. These findings provide strong evidence of the crowding out effect on elites in Chinese superstar cities due to their housing unaffordability.

Suggested Citation

  • Chen, Jie & Hu, Mingzhi & Lin, Zhenguo, 2019. "Does housing unaffordability crowd out elites in Chinese superstar cities?," Journal of Housing Economics, Elsevier, vol. 45(C), pages 1-1.
  • Handle: RePEc:eee:jhouse:v:45:y:2019:i:c:3
    DOI: 10.1016/j.jhe.2018.03.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1051137717301079
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jhe.2018.03.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gilles Duranton & Diego Puga, 2001. "Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products," American Economic Review, American Economic Association, vol. 91(5), pages 1454-1477, December.
    2. Pierre‐Philippe Combes & Gilles Duranton & Laurent Gobillon & Diego Puga & Sébastien Roux, 2012. "The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection," Econometrica, Econometric Society, vol. 80(6), pages 2543-2594, November.
    3. Li, Lixing & Wu, Xiaoyu, 2014. "Housing price and entrepreneurship in China," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 436-449.
    4. Hanming Fang & Quanlin Gu & Wei Xiong & Li-An Zhou, 2016. "Demystifying the Chinese Housing Boom," NBER Macroeconomics Annual, University of Chicago Press, vol. 30(1), pages 105-166.
    5. Shang-Jin Wei & Xiaobo Zhang, 2011. "The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China," Journal of Political Economy, University of Chicago Press, vol. 119(3), pages 511-564.
    6. Zheng, Siqi & Kahn, Matthew E. & Liu, Hongyu, 2010. "Towards a system of open cities in China: Home prices, FDI flows and air quality in 35 major cities," Regional Science and Urban Economics, Elsevier, vol. 40(1), pages 1-10, January.
    7. Kamar Ali & M. Rose Olfert & Mark Partridge, 2011. "Urban Footprints in Rural Canada: Employment Spillovers by City Size," Regional Studies, Taylor & Francis Journals, vol. 45(2), pages 239-260.
    8. Diego Puga, 2010. "The Magnitude And Causes Of Agglomeration Economies," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 203-219, February.
    9. Zhang, Chuanchuan & Jia, Shen & Yang, Rudai, 2016. "Housing affordability and housing vacancy in China: The role of income inequality," Journal of Housing Economics, Elsevier, vol. 33(C), pages 4-14.
    10. Youqin Huang, 2004. "The road to homeownership: a longitudinal analysis of tenure transition in urban China (1949–94)," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 28(4), pages 774-795, December.
    11. David M. Brasington & Diane Hite, 2005. "Demand for Environmental Quality: A Spatial Hedonic Approach," Departmental Working Papers 2005-08, Department of Economics, Louisiana State University.
    12. Milligan, Kevin & Moretti, Enrico & Oreopoulos, Philip, 2004. "Does education improve citizenship? Evidence from the United States and the United Kingdom," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1667-1695, August.
    13. Wu, Weiping, 2007. "Cultivating Research Universities and Industrial Linkages in China: The Case of Shanghai," World Development, Elsevier, vol. 35(6), pages 1075-1093, June.
    14. Chun-Chung Au & J. Vernon Henderson, 2006. "Are Chinese Cities Too Small?," Review of Economic Studies, Oxford University Press, vol. 73(3), pages 549-576.
    15. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008. "Spatial wage disparities: Sorting matters!," Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
    16. Feng, Qu & Wu, Guiying Laura, 2015. "Bubble or riddle? An asset-pricing approach evaluation on China's housing market," Economic Modelling, Elsevier, vol. 46(C), pages 376-383.
    17. Timothy Besley & Jose G. Montalvo & Marta Reynal‐Querol, 2011. "Do Educated Leaders Matter?," Economic Journal, Royal Economic Society, vol. 121(554), pages 205-205, August.
    18. Kaiji Chen & Yi Wen, 2017. "The Great Housing Boom of China," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(2), pages 73-114, April.
    19. Edward L. Glaeser & Matthew G. Resseger, 2010. "The Complementarity Between Cities And Skills," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 221-244, February.
    20. Rosenthal, Stuart S. & Strange, William C., 2008. "The attenuation of human capital spillovers," Journal of Urban Economics, Elsevier, vol. 64(2), pages 373-389, September.
    21. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117, Elsevier.
    22. Leung, Charles Ka Yui, 2014. "Error correction dynamics of house prices: An equilibrium benchmark," Journal of Housing Economics, Elsevier, vol. 25(C), pages 75-95.
    23. Wu, Jing & Gyourko, Joseph & Deng, Yongheng, 2016. "Evaluating the risk of Chinese housing markets: What we know and what we need to know," China Economic Review, Elsevier, vol. 39(C), pages 91-114.
    24. Brasington, David M. & Hite, Diane, 2005. "Demand for environmental quality: a spatial hedonic analysis," Regional Science and Urban Economics, Elsevier, vol. 35(1), pages 57-82, January.
    25. Jorge De La Roca & Diego Puga, 2017. "Learning by Working in Big Cities," Review of Economic Studies, Oxford University Press, vol. 84(1), pages 106-142.
    26. Couture, Victor, 2015. "Knowledge spillovers in cities: An auction approach," Journal of Economic Theory, Elsevier, vol. 157(C), pages 668-698.
    27. Song, Yang, 2014. "What should economists know about the current Chinese hukou system?," China Economic Review, Elsevier, vol. 29(C), pages 200-212.
    28. Brueckner, Jan K. & Thisse, Jacques-Francois & Zenou, Yves, 1999. "Why is central Paris rich and downtown Detroit poor?: An amenity-based theory," European Economic Review, Elsevier, vol. 43(1), pages 91-107, January.
    29. Dwight W. Adamson & David E. Clark & Mark D. Partridge, 2004. "Do Urban Agglomeration Effects and Household Amenities have a Skill Bias?," Journal of Regional Science, Wiley Blackwell, vol. 44(2), pages 201-224, May.
    30. Julie Berry Cullen & Steven D. Levitt, 1999. "Crime, Urban Flight, And The Consequences For Cities," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 159-169, May.
    31. Zheng, Siqi & Xu, Yangfei & Zhang, Xiaonan & Wang, Rui, 2016. "Transit development, consumer amenities and home values: Evidence from Beijing's subway neighborhoods," Journal of Housing Economics, Elsevier, vol. 33(C), pages 22-33.
    32. Yongheng Deng & Joseph Gyourko & Jing Wu, 2012. "Land and House Price Measurement in China," NBER Working Papers 18403, National Bureau of Economic Research, Inc.
    33. Cao, Jing & Hu, Wenhao, 2016. "A microsimulation of property tax policy in China," Journal of Housing Economics, Elsevier, vol. 33(C), pages 128-142.
    34. Tineke Fokkema & Jenny Gierveld & Peter Nijkamp, 1996. "Big Cities, Big Problems: Reason for the Elderly to Move?," Urban Studies, Urban Studies Journal Limited, vol. 33(2), pages 353-377, March.
    35. Dee, Thomas S., 2004. "Are there civic returns to education?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1697-1720, August.
    36. J. Vernon Henderson, 2010. "Cities And Development," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 515-540, February.
    37. Liang, Wenquan & Lu, Ming & Zhang, Hang, 2016. "Housing prices raise wages: Estimating the unexpected effects of land supply regulation in China," Journal of Housing Economics, Elsevier, vol. 33(C), pages 70-81.
    38. Edward Glaeser & Wei Huang & Yueran Ma & Andrei Shleifer, 2017. "A Real Estate Boom with Chinese Characteristics," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 93-116, Winter.
    39. Zan Yang & Jie Chen, 2014. "Housing Affordability and Housing Policy in Urban China," SpringerBriefs in Economics, Springer, edition 127, number 978-3-642-54044-8, December.
    40. Henderson, J. Vernon & Wang, Hyoung Gun, 2007. "Urbanization and city growth: The role of institutions," Regional Science and Urban Economics, Elsevier, vol. 37(3), pages 283-313, May.
    41. Robert E. Lucas, Jr., 2004. "Life Earnings and Rural-Urban Migration," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 29-59, February.
    42. Kristian Behrens & Frédéric Robert‐Nicoud, 2014. "Survival of the Fittest in Cities: Urbanisation and Inequality," Economic Journal, Royal Economic Society, vol. 124(581), pages 1371-1400, December.
    43. John V. Winters, 2011. "Why Are Smart Cities Growing? Who Moves And Who Stays," Journal of Regional Science, Wiley Blackwell, vol. 51(2), pages 253-270, May.
    44. Di Addario, Sabrina & Patacchini, Eleonora, 2008. "Wages and the City. Evidence from Italy," Labour Economics, Elsevier, vol. 15(5), pages 1040-1061, October.
    45. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863, Elsevier.
    46. Dong, Yilin, 2016. "A note on geographical constraints and housing markets in China," Journal of Housing Economics, Elsevier, vol. 33(C), pages 15-21.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jia Pengfei & Lim King Yoong, 2021. "Tax Policy and Toxic Housing Bubbles in China," The B.E. Journal of Macroeconomics, De Gruyter, vol. 21(1), pages 151-183, January.
    2. Yanjiao Song & Chuanyong Zhang, 2020. "City size and housing purchase intention: Evidence from rural–urban migrants in China," Urban Studies, Urban Studies Journal Limited, vol. 57(9), pages 1866-1886, July.
    3. Sanqin Mao & Jie Chen, 2021. "Residential Mobility and Post-Move Community Satisfaction: Empirical Evidence from Guangzhou, China," Land, MDPI, Open Access Journal, vol. 10(7), pages 1-14, July.
    4. Hu, Mingzhi & Su, Yinxin & Ye, Wenping, 2019. "Promoting or inhibiting: The role of housing price in entrepreneurship," Technological Forecasting and Social Change, Elsevier, vol. 148(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    2. Duranton, Gilles & Puga, Diego, 2014. "The Growth of Cities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 781-853, Elsevier.
    3. Chang Liu & Wei Xiong, 2018. "China's Real Estate Market," NBER Working Papers 25297, National Bureau of Economic Research, Inc.
    4. J. Meekes & W.H.J. Hassink, 2018. "Endogenous local labour markets, regional aggregation and agglomeration economies," Working Papers 18-03, Utrecht School of Economics.
    5. Pierre-Philippe Combes & Gilles Duranton & Laurent Gobillon, 2011. "The identification of agglomeration economies," Journal of Economic Geography, Oxford University Press, vol. 11(2), pages 253-266, March.
    6. Gilles Duranton & Diego Puga, 2020. "The Economics of Urban Density," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 3-26, Summer.
    7. Mingzhi Hu & Wenping Ye, 2020. "Home Ownership and Subjective Wellbeing: A Perspective from Ownership Heterogeneity," Journal of Happiness Studies, Springer, vol. 21(3), pages 1059-1079, March.
    8. Behrens, Kristian & Robert-Nicoud, Frédéric, 2015. "Agglomeration Theory with Heterogeneous Agents," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 171-245, Elsevier.
    9. Peters, Jan Cornelius, 2016. "Quantifying the effect of labor market size on learning externalities," Economics Working Papers 2016-11, Christian-Albrechts-University of Kiel, Department of Economics.
    10. Gilles Duranton, 2007. "From cities to productivity and growth in developing countries," Working Papers tecipa-306, University of Toronto, Department of Economics.
    11. Paul Verstraten & Gerard Verweij & Peter Zwaneveld, 2018. "Why do wages grow faster in urban areas? Sorting of high potentials matters," CPB Discussion Paper 377, CPB Netherlands Bureau for Economic Policy Analysis.
    12. Paul Verstraten & Gerard Verweij & Peter Zwaneveld, 2018. "Why do wages grow faster in urban areas? Sorting of high potentials matters," CPB Discussion Paper 377.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    13. Bacolod, Marigee & De la Roca, Jorge & Ferreyra, María Marta, 2021. "In search of better opportunities: Sorting and agglomeration effects among young college graduates in Colombia," Regional Science and Urban Economics, Elsevier, vol. 87(C).
    14. D'Costa, Sabine & Overman, Henry G., 2014. "The urban wage growth premium: Sorting or learning?," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 168-179.
    15. Carlsen, Fredrik & Rattsø, Jørn & Stokke, Hildegunn E., 2016. "Education, experience, and urban wage premium," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 39-49.
    16. Fredrik Carlsen & Jorn Rattso & Hildegunn E. Stokke, 2013. "Education, experience and dynamic urban wage premium," Working Paper Series 15213, Department of Economics, Norwegian University of Science and Technology.
    17. Alessia Matano & Moisés Obaco & Vicente Royuela, 2020. "What drives the spatial wage premium in formal and informal labor markets? The case of Ecuador," Journal of Regional Science, Wiley Blackwell, vol. 60(4), pages 823-847, September.
    18. Alessia Matano & Moisés Obaco & Vicente Royuela, 2018. "“What drives the spatial wage premium for formal and informal workers? The case of Ecuador”," AQR Working Papers 201806, University of Barcelona, Regional Quantitative Analysis Group, revised Jun 2018.
    19. Waxman, Andrew & Liang, Yuanning & Li, Shanjun & Barwick, Panle Jia & Zhao, Meng, 2020. "Tightening belts to buy a home: Consumption responses to rising housing prices in urban China," Journal of Urban Economics, Elsevier, vol. 115(C).
    20. Andini, Monica & de Blasio, Guido & Duranton, Gilles & Strange, William C., 2013. "Marshallian labour market pooling: Evidence from Italy," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 1008-1022.

    More about this item

    Keywords

    Housing price; Crowd out; Elites; Superstar cities; Alternative cities;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jhouse:v:45:y:2019:i:c:3. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/inca/622881 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622881 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.