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Housing allocations, imputed rents and inequality in urban China

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  • Jeffrey Zax

Abstract

This paper demonstrates that subsidized housing substantially increased inequality among urban Chinese residents in 1988 and 1995. Regressions for 1995 rental units impute estimated market rents in 1988 and 1995 for all dwelling units. In both years, these imputed values exceeded actual rents by a factor of more than ten. Estimated true household income, the sum of imputed net estimated market rent and total reported income, exceeded total reported income by approximately 23% in 1995. The Gini coefficient for true household income in 1988 was probably in the vicinity of 0.250, more than 20 % greater than the coefficient of 0.206 for total reported income. The Gini coefficient for 1995 was probably around 0.310, 11.1% greater than the reported value of 0.279. The contribution of imputed rents to inequality is much less in recent years, as urban housing has become more commodified. Consequently, the increase in urban inequality over the past 25 years has been less than that estimated on the basis of money incomes alone.

Suggested Citation

  • Jeffrey Zax, 2014. "Housing allocations, imputed rents and inequality in urban China," ERSA conference papers ersa14p1682, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa14p1682
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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa14/e140826aFinal01682.pdf
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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