Demand for Urban Quality of Living in China Evolu

Authors: Siqi Zheng Yuming Fu Hongyu Liu

Publish Date: 2008/11/26

Volume: 38, Issue: 3, Pages: 194-213

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Abstract

The rapid pace of urbanization and income growth in China in the past decade spurred in part by the liberalization of the urban housing and labor markets resulted in considerable growth in urban land rents and wagerates The objective of this study is to examine the influence of urban quality of living comprising social and environmental amenities on the evolution of crosscity landrent and wagerate differentials in China We employ the household data from the 1998 and 2004 Urban Household Survey UHS to compute the intercity landrent and wagerate differentials inferring the rent growth in individual cities from a household housing consumption demand equation as home values were not reported in the earlier UHS Our findings show a strong increase of urban residents’ willingness to pay for local amenity qualities between 1998 and 2004We acknowledge the financial support of NUS Academic Research Fund R297000079112 We would like to thank an anonymous referee the participants at the 2006 AREUEA annual meeting in Boston the research workshop at Southwestern University of Finance and Economics in China and the 2007 APRU Real Estate Research Symposium in Singapore for their valuable comments SQ Zheng thanks the National Natural Science Foundation of China for research support No 70603017 We benefited from discussions with Shihe Fu and WenChi Liao Rongrong Ren and Yang Cao provided excellent research assistance

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