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Housing Inequality in Urban China: Guangzhou 1996 and 2005
By
Si-ming Li
Department of Geography
And
Centre for China Urban and Regional Studies
Hong Kong Baptist University
October 2009
Acknowledgements: The author would like to thank Miss Becky Pang who assisted in
data analysis. This research is funded in part by Hong Kong Research Grants Council,
Grant No. HKBU242907.
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Abstract
Based on household surveys conducted in the City of Guangzhou in 1996 and 2005, this
paper examines the changes in the extent and nature of urban housing inequality upon the
cessation of the welfare allocation of housing in the southern gateway to China. The
result shows that the overall level of housing inequality has remained quite stable. Both
continuities and changes are revealed for the factors behind the differences in housing
consumption. In particular, household income has assumed much greater importance.
However, variables characterizing social and housing stratification in the former socialist
planned economy, such as membership in the CCP and hukou status, continue to affect
access to housing resource.
Keywords: Housing inequality, Guangzhou, welfare allocation of housing, determinants
of housing consumption
Introduction
China is undergoing unprecedented urban transformation. Official statistics put
the total urban population at the end of 2006 at 577.06 million and an urbanization rate of
43.9 percent. The corresponding figures for 1980, when the reform was about to begin,
were 191.40 million and 19.39 percent. In other words, some 386 million people were
added to Chinas urban areas over a period of 26 years. While the early reform years saw
the revival of market towns and rapid growth of small cities in association with rapid
development of rural or township and village enterprises, in more recent times especially
since the mid 1990s growth has been concentrated in the countrys largest metropolitan
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centres (Li, 2008; Gu et al, 2008). Between 2000 and 2004, the average population
growth rate of super-large cities (cities with non-agricultural population1 exceeding 2
million) reached 10.77 percent per annum. On the other hand, the population of small
cities (cities with non-agricultural population less than 200,000) actually decreased by an
average of 2.59 percent (Li, 2008, p. 362).
Yet, despite the immense population pressure, the housing conditions for the
average urban dweller in China have registered remarkable improvements over the past
two decades. According to the Statistical Yearbook of China, the per capita housing space
consumed in urban areas increased steadily from 3.6m
2
in 1978 to 10.0 m
2
in 1985, 16.3
m2 in 1995, 20.8 m2 in 2001 and 26.1 m2 in 2005 (Li and Li, 2008, p. 384). Admittedly
the official statistics refer to the situation of people with the properhukou, and it is well
documented that migrants housing conditions are generally much worse (Wang et al,
forthcoming). Nonetheless, the progress made is still immense. Census data also show
that other aspects of housing conditions such as availability of separate toilet and kitchen
inside the dwelling unit as well as home furnishing also manifest substantial gains.
Moreover, the urban homeownership rate jumped from 24 percent in 1990 to 72 percent
in 2000 and further to 82 percent in 2005 (Li and Li, 2008, p. 386). Underlying the huge
increase in per capita housing space amidst phenomenal population growth are massive
investments in housing construction. The 2000 Population Census shows that 47.6
percent of the urban housing stock was less than 10 years old. In Shanghai, the largest
city of the country, the figure was 51.3 percent (Li and Li, 2008, p. 387). The pace of
1 Chinas hukou or household registration system comprises a dual classification, firstly the differentiation
the population into agricultural and non-agricultural, and secondly into local and non-local (see, for
example, Chan, 2009). With the massive increase in migration and the encroachment of urban areas into
surrounding farmlands, many holding the agricultural status are no longer peasants. Yet, officially they are
still considered agricultural by virtual of their hukou status.
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housing construction accelerated even further in the new millennium. New housing starts
by real estate developers increased from 188.0 million m2 in 1999 to 551.6 m2 in 2005,
and the total number of commodity housing completions between 1999 and 2005 reached
19.88 million units (Li and Li, 2008, p. 399).
Surely, the improvements are unlikely to be evenly felt among all segments of the
population. Some would have benefited more while others much less. For certain groups
the housing conditions could be even worse than before. While there existed housing and
other inequalities under the former socialist redistributive economy, the nature of housing
inequality in China today is much more complicated, with market forces playing an
increasingly influential role. The gradualist and incremental nature of Chinas reform
(Zhu, 1999), particularly the continuing domination of the Chinese Communist Party
(CCP or Party) and the state over economy and society, however, implies that the nature
of housing inequality in China is unlikely to be the same as that in Western countries.
In China under Mao the major social cleavage was the rural-urban divide, which
was underpinned by both the hukou or household registration system and a price system
variously known as scissors difference, which favoured urban-industrial goods over
primary commodities (Chan, 1992). Only people with non-agricultural hukou would be
provided with grain rations and assigned to a danwei or work unit (Lu and Perry, 1992).
The latter, which could be a state or Party organ or a state enterprise, was much more
than an employer. It also acted as the single most important institution performing
redistribution functions as well as exercising social and political control. The great
majority of urban dwellers were danwei members, and lived in danwei-provided housing
within the respective danwei compounds.
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While most danwei dwellings were of similar size and quality, the lopsided
emphasis on production over consumption resulted in perennial severe housing shortage
(Chan, 1992). Not every danwei member would be able to secure a danwei flat. Priority
in the allocation ofdanwei housing was based on job rank, seniority, Party affiliation and
rank in the Party, and recognized contribution to the state. Also, not every danwei was
equally endowed with resources. Enterprises not in industries top on the development
agenda were deprived of resources. Housing conditions in such danwei tended to be
much worse than those that were emphasized. But it was those people without danwei
housing who had to stay in dilapidated housing inherited from pre-1949 times, the great
majority of which came under the control of the municipal housing bureau upon the
socialist transformation of the 1950s, endured the worst housing conditions (Li and Li,
2008; Bian and Logan, 1996).
Accompanying the economic reform was reform in urban housing provision.
Initially the reform focussed on the supply side, with the establishment of real estate
companies to replace individual danwei as the main developers of new housing. Yet most
commodity housing units built by the real estate companies was bought by the danwei for
subsequent allocation as a welfare item to their workers. With the promulgation of the
Views on Nationwide Implementation of Urban Housing Reform in 1991 and the
Decision on Deepening Urban Housing Reform in 1994, the emphasis of the reform
gradually shifted to the demand side, with homeownership promotion being a major
objective. Danwei were encouraged to sell their housing stock to sitting tenants at highly
discounted price and provide substantial assistance those currently without danwei
housing to purchase in the open market. Housing thus sold is termed reform housing.
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Established criteria such as job rank and seniority in the workplace were important
considerations in prioritizing the sale of reform housing and the price charged (Wang and
Murie, 1999; Li and Li, 2008).
In 1998 the State Council called for the ending of the welfare allocation of
housing. That is to say, danwei would cease to provide subsidized housing to their
workers. From then onwards, most households have to satisfy their housing needs
through buying or renting in the market. Under such circumstances, wealth and income,
which have become increasingly polarized under the reform, are likely to become the
most important determinants of housing consumption. Although municipal governments
have continued and even expanded the comfortable housing scheme under which
selected housing development projects would be put on sale to low and middle income
households at prices some 30 percent below prevailing market levels, such housing
remained quite expensive and beyond the reach of the target population. The last two
years of the twentieth century saw workers in state-owned enterprises and state and Party
organizations stampeding to buy reform housing, a phenomenon variously known as
catching the last train (Li and Yi, 2007). Of course, there were those retirees and low
income workers, as well as those who were forced to be permanently off duty or
xiagangbecause of plant closures or firm restructuring in conjunction with the enterprise
reform of the mid and late 1990s. Expectedly, these people could not afford to buy even
with the big discounts.
In the early 2000s, one city after another, reform housing was given full property
right and allowed to enter the market. With the huge difference between the market and
subsidized price, this is tantamount to the conferment of windfall profits to the former
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purchasers of reform housing, who are now able to trade their reform housing unit for
spacious commodity housing in a well landscaped and well maintained gated housing
estate. This, together with phenomenal increases in housing price, has many times
magnified wealth inequality in urban China, which now increasingly manifests in terms
of housing tenure and the value of the dwelling the individual owns (Li, 2007). It may be
argued that people who did well in the former socialist planned economy are doing even
much better in the present socialist market economy. Those who were left behind in the
latest round of housing reform have to live with their dilapidating dwellings or wait for
resettlement to remote suburbs upon redevelopment of their existing premises.
The discussion so far has been concerned with people with the properhukou. The
reform has brought hundreds of millions of migrants from the countrys vast rural
hinterlands to the major metropolitan centres. A two-class society comprising those with
and without the properhukou today characterizes all major cities in China (Chan, 2009)
The great majority of the migrant population suffer from discrimination in both the job
and housing markets. In particular, subsidized housing is largely out of reach to the
migrant population. And, given the high price, formal market housing is unaffordable to a
large proportion of migrants. Many have to be contented with substandard housing with
dubious legal status in the urban villages on the former urban-rural fringe (Jie and
Taubmann, 2002).
The highly complicated and varied housing consumption scene resulting from the
different phases of economic and housing reform described above points towards not
only heightened housing inequality but also both continuities and changes in the nature of
housing inequality. Based on data derived from household surveys conducted
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Guangzhou in 1996 and 2005, the present paper attempts to provide quantitative
indicators measuring the extent of such changes. It may be noted that in the earlier survey
year most commodity housing built was first sold to individual danwei, which then rented
or sold the housing to their workers. In the latter year the market dominated both the
supply and demand sides. Thus, comparisons based on the two surveys provide allow us
to gauge the difference in the extent and nature of housing inequality between a system
which is primarily market based and one in whichdanwei and other socialist
redistributive institutions still dominated the housing provision scene. The following
section details how the two surveys were conducted and discusses the comparability of
the two datasets. The empirical analysis is divided into two parts, first on the overall
pattern of housing inequality in the two survey years, and second on the changes in the
nature of housing inequality between the two years.
Data
Both the 1996 and 2005 Guangzhou surveys were conducted through household
interviews with the assistance of the Centre of Urban and Regional Studies at Sun Yat-sen
University, which had substantial experience in doing household interviews
established connections with government departments at the municipal, district and
street-committee levels of the city. Such connections were essential for obtaining the
requisite data for the construction of a reliable sampling frame as well as for obtaining
the permission to undertake the household interviews.
Strictly speaking, the two surveys were targeting at two different types of housing
and hence populations. More specifically, the 1996 survey only covered n
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constructed commodity housing, that is, housing put up by developers for sale at market
price. But the 1996 survey was carried out prior to the ending of the welfare allocation of
housing. While some work units continued to build housing for their workers, in
Guangzhou supply-side commodification was well under way. The bulk of new housing
supply was provided by real estate developers, although the main buyers remained the
individual danwei. In the sample only about 25 percent of the households purchased or
rented directly in the open market (Li, 2000). The rest remained within the subsidized
housing sector. In this sense, the 1996 sample still provided a snapshot of the general
housing situation of Guangzhou at the time of survey, despite its specificity. Surely,
caution has to be exercised in interpreting the findings based on the survey. By definition,
all respondents interviewed were recent movers. Moreover, they were either those who
were privileged enough to be assigned by the given danwei or municipal housing bureau
new apartments, or those who were able to purchase or rent in the open market. All these
suggest a built-in bias towards the better-to-do groups. As such, the degree of housing
inequality revealed by the sample is likely to be an underestimate of the true extent.
However, by introducing statistical controls in a multivariate setting, it is still possible to
provide reasonable estimates of the effects of individual factors on housing consumption.
The sampling frame was constructed by reference to the list of presale commodity
housing projects issued by the Municipal Land and Housing Administration Bureau over
the period January 1992 - August 1994. The target sample size was 1000 housing units
(and hence 1000 households). A multi-level probability proportional to size (PPS)
sampling strategy was adopted. In particular, the sample was designed so that the number
of housing units surveyed in each of the eight urban districts of Guangzhou at that time
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was proportional to the total number of presale housing units in the given district. Within
each urban district, a number of urban streets (or sub-districts) were selected as sampling
spatial clusters on a randomized basis, according to the size distribution of the sub-
districts in respect to the number of housing units. Finally, each cluster contained 25
sampled housing units, again selected on a randomized basis. This geographically based
sampling strategy ensured adequate representation of different types of residential areas
in different parts of the city. Included in the questionnaire were a wide range of questions
on various aspects of housing consumption as well as on the socio-demographic attributes
and employment characteristics of each member of the household. It took on average 45-
50 minutes to complete an interview.
In comparison, the 2005 survey was a more general survey, with the target
population being all households in Guangzhou. Again, a multi-level PPS sampling
strategy was adopted. Street- or Sub-district-level tabulations provided by the Public
Security Bureau on the size distribution of households (including those without the local
hukou or household registration status) over the former eight urban districts plus the
newly incorporated districts of Panyu were used to construct the sampling frame. The
target sample size was 1200, to be distributed according to the PPS principle over the
nine urban districts surveyed. Again, for a given urban district a number of spatial
clusters or urban streets were selected and then for each selected cluster 25 households
were sampled following the PPS principle on a randomized basis. Comparison with data
given by the 2005 One Percent Sample Census shows reasonably closed correspondence
(Li, forthcoming). However, although the Guangzhou survey under-sampled migrants
without properhukou in the city; this is largely because only households residing in
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permanent housing were interviewed. It may be argued that the 2005 Guangzhou survey
provides a reasonably good snapshot of the housing consumption pattern in the city at the
time of survey. The questionnaire employed was constructed with reference to the one
used in the 1996 survey, although the 2005 questionnaire tried to elicit detailed
information also on residential and employment history.
Overall Housing Inequality
Housing is a multi-dimensional good. Size of dwelling, type of structure in which
the dwelling is located, internal design, decoration and furnishing, dwelling age and state
of maintenance, estate and neighbourhood amenities, accessibility to employment and
shopping facilities, etc. are all important dimensions affecting how much and what kind
of housing service a dwelling provides. While it is not absolutely essential, the
construction of a composite measure would facilitate the comparison of the state of
housing well being between individuals and households, and hence the assessment of
housing inequality.
Commonly employed in the analysis of housing demand is the price or rent
(annualized price) of the dwelling unit. Hedonic theory argues that the price of a
dwelling, which is the outcome of the interplay between a myriad of supply and demand
factors, can be seen as the summation of the values attached to individual housing
attributes (Olsen, 1987; Straszheim, 1973). Thus, price or value is commonly used as a
measure of the composite good, housing service. However, the use of the price variable
presumes the presence of a more or less competitive market, which is clearly not the case
in China where the state continues to exert substantial influence on the land and housing
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market and where collusion between real estate developers and local government is
prevalent. The price variable was particularly problematic in 1996 when the great
majority of housing was sold by danwei and the municipal housing bureau to sitting
tenants at heavily discounted prices.
In this study dwelling floor area (in m2) is used to gauge the amount of housing
service consumed. Admittedly this is not a perfect measure. But this is a variable that is
more readily susceptible to inter-temporal comparison. The fact that the 1996 survey
included only newly completed housing whereas the 2005 survey tried to proportionately
include all types of housing could render the comparison somewhat problematic.
However, Guangzhou, along with other major cities in the country, has experienced a
housing construction boom unseen elsewhere in the world. The housing stock is very
new, mostly built in the 1990s and beyond. The massive scale of housing construction in
recent years has introduced a degree of standardization in the floor space measure for the
two surveys.
Between the two survey years the Chinese economy and society had undergone
tremendous changes. Almost incessant double-digit over the period growth not only
resulted in a general increase in income, but it also brought about much greater
concentration of wealth towards business proprietors, managers of major state-owned
enterprises, and people with access to valuable business and state information and with
close connections to government at different levels. Further, the enterprise reform of the
1990s and the growth of the foreign-funded enterprises, which tended to reward the top
managers and sought-after professionals remuneration packages mimicking those in their
home countries, led to much enlarged income spread. On the housing front, the 1998
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reform ended the welfare allocation of housing. Since then, wealth and income have
probably become the single most important factors underlying housing consumption. All
these argue for a substantial increase in housing inequality.
Figures 1a and 1b plot the distribution of dwelling floor space in the two samples.
The mean floor space consumed increased slightly from 58.9 m2 for the 1996 sample to
62.3 m2 for the 2005 sample. But this rather small increase has to be judged against the
fact that the 1996 data were only concerned with newly completed commodity housing
units, which were of better quality and generally larger than the pre-1949 old dwellings as
well as danwei apartments built in earlier times. Also, the data and probably pertain to the
better-to-do groups. It may be safe to conclude that the overall improvement in housing
consumption is substantially larger than the difference in the mean value between the two
samples. The corresponding standard deviations were 22.93 m2 and 25.81 m2,
respectively. Thus, while in both years there existed quite substantial variations in the
level of housing consumption, the difference between the haves and have-nots appeared
not to be too extreme.
Figures. 1a and 1b: The distribution of dwelling floor space in 1996 and 2005
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The coefficient of variation (CV), defined as standard deviation divided by the
mean value, is a commonly employed measure of inequality. The CV increased slightly
from 0.39 for the 1996 sample to 0.41 for the 2005 sample. The slight increase in the CV,
again, has to be judged against the difference in the target populations of the two surveys.
Above it was argued that the 1996 sample would probably bias the inequality estimate
downward. If this is indeed the case, then it is safe to conclude that the increase in
housing inequality was likely to be even smaller than what the difference in CV suggests.
Another commonly employed measure of inequality is the Gini coefficient, which ranges
from 0 (absolute equality) to 1.0 (absolute inequality). Both samples yield a Gini
coefficient of 0.21, again indicating stable and relatively mild housing inequality levels,
irrespective of the massive changes that had taken place both in the housing and job
markets between the two survey years.
This is a rather surprising finding. In both samples migrants were unde
represented. The degree of housing inequality revealed would be substantially higher if
the sampling bias was corrected. But this would not materially affect the conclusion that
the degree of housing inequality in Guangzhou remained more or less the same between
1996 and 2005. Perhaps it may be noted that neither the CV nor the Gini coefficient
computed takes into consideration spatial variations and hence accessibility to jobs,
schools, medical services, shopping and neighbourhood amenities. In Guangzhou and
other cities of the country, almost all good schools and hospitals as well as up-market
shopping facilities and entertainment centres, in addition to the bulk of high status
administrative and managerial jobs, are located within or close to the inner core (Li and
Li, forthcoming). Previous studies reveal strong residential preference for centra
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locations in the city, which implies steep rent gradients (Wang and Li, 2006). Dwellings
with the same floor space in central locations and those in distance suburbs yield quite
different levels of utility to the household. To the extent that better-off households are
able to reside in highly priced commodity housing in redeveloped inne
neighbourhoods while large numbers ofxiagangworkers and retirees have been forced to
relocate to far-flung suburbs lacking amenities, the actual degree of housing equality in
more recent years could be a lot more severe than was indicated by the CV or Gini
coefficient reported above. Moreover, market-led redevelopment has turned many inner-
city neighbourhoods and former work-unit compounds to homogeneous housing estates,
both in terms of socioeconomic composition and dwelling size. As a result, the
geographical distance between the better-to-does and the less-well-offs has probably
increased by a wide margin. This increase in residential differentiation could greatly
heighten the sense of injustice especially among the deprived.
Changes in the Nature of Inequality
The same level of housing inequality could arise from different underlying
factors. This section reports the result of multiple regression analysis, which analyses the
determinants of housing consumption in the two survey years. Previous works on housing
demand suggest that demographic characteristics such as household size, age of the
household head, and stage in the family life cycle are fundamental in determining
housing needs and preferences and hence the amount of housing consumed (Clark and
Dieleman, 1996). Of course, in a market setting, income is of paramount importance.
Studies conducted in the United States show that the income elasticity of the demand for
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housing service is in the region of 0.7, that is, an 1 percent increase in income will result
in 0.7 percent increase in housing consumption, other things being constant (Olsen,
1987). Education attainment, as a measure of human capital, is a major determinant of
income; in addition, education also structures residential preferences and the ability to
make appropriate housing decisions under fast-changing market conditions. Occupational
status is another constituent component in assessing socioeconomic status. Multinational
firms generally offer subsidized housing to expatriate workers and high ra
managerial and professional staff.
In a socialist redistributive economy, rank in the work unit and the CCP largely
determines the ability to command redistributive powers (Szelenyi, 1983; Bian and
Logan, 1996). Advancement along the job ladder is closely tied to formal education
credentials when the ability to generate profit is not a major concern. In the case of
China, studies using data of the 1980s and 1990s have found all three variables, namely,
education, occupational rank and CCP membership, to be major determinants of urban
housing consumption (Bian and Logan, 1996; Huang and Clark, 2003; Li, 2000; Li and
Li, 2006). Another variable which is of importance in structuring access to resource under
state socialism is the nature of the work unit to which an individual is affiliated. Priority
sectors are better endowed with resources. Also, national-level state enterprises are much
better resourced than provincial-level ones, which, in turn, are much better resourced than
enterprises established by city and county authorities. Collective enterprises,
enterprises set up by street committees in urban areas and township authorities in rural
areas, are the least resourced (Bian and Logan, 2003; Li and Li, 2008). Of course, there is
hukou status, which assumes particular importance with hundreds of millions of migrants
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of rural origin flocking to the countrys largest metropolitan centres.
In the regression models the dependent variable is log (dwelling floor space)
(m2).2 The independent variables include: (1) age, household size, family type (0 = family
with children, 1 = otherwise); (2) log (household income per annum) (RMB 10000); (3)
education (0 = tertiary, 1 = primary or lower, 2 = junior secondary, 3 = senior secondary);
(4) occupational rank (0 = cadre or managerial, 1 = unskilled worker 2 = skilled worker, 3
= professional, 4 = others); (5) danwei type (0 = non-state, 1 = state); (6) source of
housing provision (0 = danwei, 1 = market, 2 = municipal housing bureau, 3 = others);
and (7) membership in the CCP (0 = non-member, 1 = member), and (8) hukou (0 = non-
local, 1 = local). The results are given in Table 1. The estimated equations for both years
are highly significant. While the R2 obtained are not very high, 0.33 for 1996 and 0.31
for 2005, they are quite acceptable for regressions employing micro-level
Nonetheless, the exclusion of location variables in the model probably reduces the
goodness of fit.
Table 1.Linear regression analysis in 1996 and 2005
1996 2005
Independent variable: log dwelling floor space
(square meters)
R square = 0.327 R square = 0.305
B B
Age of head 0.003** 0.000
Household size 0.051*** 0.060***
Family type: married with children -0.048 0.014
Log (Household income per annum) (RMB 10000) 0.136*** 0.187***
Education
Primary or lower N.A. 0.036
Junior secondary -0.099** -0.064
2 The logarithmic scale gives better fit than the linear scale. Also with income also expressed in logarithmic
scale the associated parameter gives the income elasticity estimate. The parameters of other variables give
the percentage change in floor space resulting from one unit change of the respective variable, which is
more easily to be subject to inter-temporal comparison.
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Senior secondary -0.145*** -0.003
Occupation rank
Unskilled worker -0.098** -0.048
Skilled worker -0.155*** -0.038
Professional -0.022 0.022
Others -0.095* -0.110
Danwei type: state 0.007 -0.010
Source of housing provision
Market -0.040* 0.140***
Municipal Housing Bureau -0.342 -0.271***
Others -0.065 0.138***
Membership in the CCP 0.106*** 0.113***
Hukou: local -0.266*** 0.119***
CONSTANT 3.892*** 1.713***
*significant level at 0.05; ** significant level at 0.01; ***significant level at 0.001
Let us first consider the demographic attributes. Age, which correlated closely
with seniority in the workplace especially under low or non-existent job mobility in the
former centrally planned economy, is highly significant and positive for the 1996
equation. Numerically, every 10 years increase in age was associated with 4 percent
increase in housing space. However, age is not significant in the 2005 equation and the
coefficient estimate is close to zero. Probably this is because danwei provision of housing
was no longer common in the latter year. Household size is significant in both equations.
In terms of magnitude, in 1996 one extra person was associated with 5.6 percent more
floor space; in 2006 the corresponding figure was 3.4 percent. With respect to family
type, in both years no significant difference was found between families with and without
children. However, individuals who were single or widowed consumed slightly more
housing space in 1996 but substantially less housing space (19.7 percent less in
comparison with families with children) in 2005. The latter finding is more akin to the
situation in most market economies.
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Next, we examine household income. While the variable is significant and
positive in both equations, the magnitude of influence differs tremendously. In 1996, the
parameter estimate, which gives the income elasticity of demand for housing, was 0.14,
whereas in 2005 it increased to 0.18. As the income measured employed refers to current
income rather than permanent income, the true income elasticity in Guangzhou in both
years would be somewhat higher than these estimates. As expected, income has become
increasingly important in determining housing consumption in China, although the 2005
estimate, if allowed for under-estimation, is still somewhat below those obtained in
Western economies.
Education attainment was a highly significant variable in 1996. People with
tertiary education had much higher level of housing consumption than did people
without. But in 2005, all education dummies were insignificant. Education probably
continued to play a significant role in determining a persons occupation and income and
through this on housing consumption; however, its direct effect was no longer obvious
with the deepening of the market-oriented reform.
The occupational status dummies generally yield the expected sign. In both years
managerial and professional workers enjoyed significantly more housing space than
either non-skilled or skilled workers. The differences, after controlling for income and
other variables, are larger in the 1996 equation than in the 2005 equation. This suggests
the diminishing effects of pure job ranking on housing consumption, a finding which is
not too dissimilar with the finding on education attainment reported above.
None of the danwei dummies in either equation is significant. In Guangzhou, even
back in 1996, nature ofdanwei (whether being a state work unit or not) did not have any
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significant influence on how much housing an individual consumed. Source of housing
provision, however, was a major determinant of housing consumption in both years.
More specifically, housing provided by the municipal housing bureau (accounting for 7.8
percent of the 1996 sample and 7.7 percent of the 2005 sample), was smaller than
housing provided by individual danwei by 33.9 percent in 1996 and 26.4 percent of the
sample in 2005. Housing obtained in the market (accounting for 42.9 percent of the 1996
sample and 60.8 percent of the 2005 sample), which did not differ too much in size from
housing from danwei in 1996, was 14.1 percent larger in 2005. In other words, people
who were able to move from municipal and danwei housing to market housing, including
those who trade their reform housing unit for better dwellings in the market, were those
who gained most in terms of floor space consumed.
Previous works established the importance of CCP membership in access to
housing resource. In both regression equations, CCP membership (which accounts for
23.1 percent of the 1996 sample and 15.1 percent of the 2005 sample) is significant at the
0.001 level. Also the magnitude of influence is about the same: 10.0 percent for the 1996
equation and 11.9 percent for the 2005 equation. Considering that membership in the
CCP probably also affects promotion prospects, the total effect of CCP membership on
housing consumption in Guangzhou is quite substantial, despite the drive towards
marketization and the neoliberal rhetoric in conjunction with globalization.
Finally, there is hukou status. Surprisingly, the coefficient estimate for the 1996
equation is negative and significant at the 0.001 level, although the one for the 2005
equation is positive and of marginal significance. Of course, the rather surprising finding
for 1996 may indicate that while migrants at the time were discriminated in the job
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market, and because of this, lived in relatively poor housing, housing discrimination per
se was not apparent. However, this was probably due to the fact that the 1996 sample
only contained recently built commodity housing, and the migrants included in the
sample were the better off groups. Similar but smaller selectivity bias was likely to be
present in the 2005 sample. Migrants who did not have permanent residence were
excluded from the survey. Nonetheless, the findings do suggest that for those migrants
who are able to establish themselves in the city and move up the job ladder, their housing
lots probably are not too different from those holding the properhukou.
Concluding Remarks
The results of the statistical analysis using the 1996 and 2005 survey data reveal
both quite surprising findings and those in line with expectation. Regarding the overall
level of housing inequality, the two surveys yield similar CVs and almost identical Gini
coefficients. Both measures indicate relative mild levels of inequality in the two years. At
least in the case of Guangzhou, which was relatively advanced in its transition to a
housing regime based primarily on market provision back in 1996, the newest phase of
the reform which called for the cessation of the welfare allocation apparently has not
worsened significantly housing inequality. Most people have been able to benefit from
the improvement in housing space brought about by the massive housing construction
boom in recent years. Of course, in cities where the state sectors had a total dominance
over the economy and society, and where the danwei provision of housing was much
more entrenched, the enterprise reform and the latest marketization move in the housing
realm could bring about vastly different effects on housing distribution.
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With respect to the individual factors affecting housing consumption, life-cycle
effects have remained relatively weak, although singles (including widowed) in the latter
year consumed much less housing space than family households. Income has assumed
greater importance, but the income elasticity of demand in 2005 was still quite low, even
if the income measure employed refers to current rather than permanent income.
Education per se in the latter year no longer yielded significant effect on dwelling floor
space. Occupational rank remained to be effective, however, the magnitude of influence
also declined. All these point towards greater market influence on housing consumption
than in 1996. But, CCP member remained a major factor affecting housing space
consumed, and the magnitude of influence in 2005 was even slightly larger than in the
1996. On the whole, it may be concluded that the nature of housing inequality in
Guangzhou differed very little between the two years.
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