Housing choice behavior of urban workers in China's transition to a housing market

Restoring demand for commodity housing is crucial for the success of housin g reform in previously centrally planned economies; yet weaning workers awa y from publicly subsidized housing is a difficult task. Taking advantage of a unique survey, we show that the intention to buy commodity housing by Ch inese urban workers is sensitive to various incentives, including housing m ismatch, liquidity constraints, risk attitudes, access to publicly subsidiz ed housing, and commodity housing prices. Our probit estimates indicate tha t the access to publicly subsidized housing is at least as important as the affordability of commodity housing in discouraging private home ownership. (C) 1999 Academic Press.