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Housing assets to the elderly in urban China: to fund or to hedge?

Author

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  • Zan Yang
  • Ying Fan
  • Cindy Hiu-ying Cheung

Abstract

Housing has become the most important asset held by a large proportion of China’s older citizens. Therefore, the role of housing wealth in the consumption decisions of the elderly is a central topic of research and gains insights into the saving, investment and consumption decisions made throughout household life to meet later pension needs. In this paper, using data drawn from a household survey conducted between 2002 and 2009, we estimate the influence of housing wealth on the non-housing consumption of the elderly, and identify the mechanisms underlying this relationship. We find that on average, changes in housing wealth have limited effects on elderly consumption. However, we also find that the role of housing in consumption differs according to the income, health status, and living arrangements of the elderly. The paper draws attention to the influence of housing and its links with social and health-care systems on the lives of older people, with important policy implications.

Suggested Citation

  • Zan Yang & Ying Fan & Cindy Hiu-ying Cheung, 2017. "Housing assets to the elderly in urban China: to fund or to hedge?," Housing Studies, Taylor & Francis Journals, vol. 32(5), pages 638-658, July.
    • Handle: RePEc:taf:chosxx:v:32:y:2017:i:5:p:638-658
    DOI: 10.1080/02673037.2016.1228853
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    References listed on IDEAS

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    1. Atella, Vincenzo & Brugiavini, Agar & Pace, Noemi, 2015. "The health care system reform in China: Effects on out-of-pocket expenses and saving," China Economic Review, Elsevier, vol. 34(C), pages 182-195.
    2. Lina Walker, 2004. "Elderly Households and Housing Wealth: Do They Use It or Lose It?," Working Papers wp070, University of Michigan, Michigan Retirement Research Center.
    3. Jonathan S. Skinner, 1996. "Is Housing Wealth a Sideshow?," NBER Chapters, in: Advances in the Economics of Aging, pages 241-272, National Bureau of Economic Research, Inc.
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    1. Zan Yang & Ying Fan & Liqing Zhao, 2018. "A Reexamination of Housing Price and Household Consumption in China: The Dual Role of Housing Consumption and Housing Investment," The Journal of Real Estate Finance and Economics, Springer, vol. 56(3), pages 472-499, April.
    2. Zan Yang & Yuqi Fu, 2019. "Physical Attributes of Housing and Elderly Health: A New Dynamic Perspective," IJERPH, MDPI, vol. 16(24), pages 1-14, December.
    3. Fan, Ying & Sing, Tien Foo, 2021. "Macroeconomic policy-induced wealth effects on Chinese foreign housing investments," China Economic Review, Elsevier, vol. 69(C).
    4. Yu, Miao & Zhao, Xintong & Gao, Yuning, 2019. "Factor decomposition of China’s industrial electricity consumption using structural decomposition analysis," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 67-76.
    5. Hanewald, Katja & Bateman, Hazel & Fang, Hanming & Wu, Shang, 2020. "Is there a demand for reverse mortgages in China? Evidence from two online surveys," Journal of Economic Behavior & Organization, Elsevier, vol. 169(C), pages 19-37.

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