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Have housing prices contributed to regional imbalances in urban–rural income gap in China?

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Abstract

High housing prices and the urban–rural income gap are two important social problems that China is facing currently. Due to the imbalance of regional economic development, the relationship between housing prices and urban–rural income gap in regions may also be different. This study examines this relationship across regions in China by employing the bootstrap panel Granger causality method. We find that regional differences obviously exist between the housing prices and the urban–rural income gap. Housing prices have widened the urban–rural income gap in the eastern region, have narrowed it in the northeastern region, and have no significant impacts in the central and western regions. On the other hand, the urban–rural income gap is an important driver of the increasing housing prices in the eastern region, has suppressed them in the central and northeastern regions, and has no significant influence in the western region. The government may curb the excessive growth in housing prices to avoid widening the urban–rural income gap in the eastern region. For the northeastern region, boosting the housing market may help to narrow the income gap. For the central and western regions, policies should be committed to raising the resident income to reduce the income gap. These can provide references for policy-making.

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Notes

  1. In 1958, the central government categorized people into “agricultural hukou” and “non-agricultural hukou” and formed a unique dualistic household registration (Hukou) system with the original intention to restrict urban- rural migrants and to promote urbanization. Under this system, rural migrants cannot receive identical social treatment and welfare as urban residents, which increases the urban–rural income gap (Zang et al., 2015).

  2. The “new normal”, put forward by Chinese President Xi Jinping, refers to the new stage of economic development. Under the "new normal", economic growth shifted from rapid growth to sustainable development, the economic structure was continuously upgraded, and economic development became innovation-driven.

  3. Since authoritative data of the average disposable income of rural residents is not available, the per capita net income of rural residents is used instead of disposable income (Ma et al., 2018; Sicular et al., 2007).

  4. https://baijiahao.baidu.com/s?id=1665083753938833487.

  5. https://baijiahao.baidu.com/s?id=1607734805522733844.

  6. The net outflow of the population in Central China is the highest, with the characteristic of a “population collapse”, and more than 80% of the outflow population are migrant workers (Lv & Wang, 2017).

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Authors and Affiliations

  1. School of Science and Information Science, Qingdao Agricultural University, 700, Changcheng Rd., Qingdao, Shandong, China

    Xiao‑Cui Yin

  2. School of Economics, Qingdao University, 62, Kedazhi Rd., Qingdao, Shandong, China

    Chi-Wei Su

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  1. Xiao‑Cui Yin
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This research is partly supported by the National Social Science Fund of China (20BJY021), Research Fund for High-Level personnel of Qingdao Agricultural University (No 1118028)

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Yin, X., Su, CW. Have housing prices contributed to regional imbalances in urban–rural income gap in China?. J Hous and the Built Environ 37, 2139–2156 (2022). https://doi.org/10.1007/s10901-022-09945-1

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