International ConferenceonChina'sUrbanLandand Housing inthe21st Century.HongKongModelingInstitutional ConstraintsonHousingBehaviorin ChinaConceptualand Methodological ChallengesZhilin LiuSchoolofPublicPolicy&ManagementTsinghuaUniversity,Beijing,China13-15December2007
Modeling Institutional Constraints on Housing Behavior in China: Zhilin Liu School of Public Policy & Management Tsinghua University, Beijing, China 13-15 December 2007 Conceptual and Methodological Challenges International Conference on China’s Urban Land and Housing in the 21st Century, Hong Kong
TheConceptual ChallengeActors-Institutions> Giddens,The agency-structure problem TheInstitutional Turn inSocial Sciences> Institutions as “the rules of the game in a society.(North,1990)>Definingthe opportunity sets ofmarketplayers> Preferences endogenously determined Howto incorporate the institutional dimensioninto the study of housing behavior?> The context of an emerging market economy
The Conceptual Challenge Actors – Institutions ➢ Giddens, The agency-structure problem The Institutional Turn in Social Sciences ➢ Institutions as “the rules of the game in a society.” (North,1990) ➢ Defining the opportunity sets of market players ➢ Preferences endogenously determined How to incorporate the institutional dimension into the study of housing behavior? ➢ The context of an emerging market economy
AnNewInstitutional Framework Understanding individual behavior from aninstitutionalperspectiveInstitutionsIndividualsPreferenceandutilityRules of the gameFigure1 A simplified framework of newinstitutionaleconomics on interactions of actors and institutions
An New Institutional Framework Understanding individual behavior from an institutional perspective Individuals Preference and utility Institutions Rules of the game Figure 1 A simplified framework of new institutional economics on interactions of actors and institutions
Context:HousingMarketization Declining influence of public sector investment inresidential development60.090.0050.0%80.0050.070.0060.0040.050.0031.5%30.040.00Au30.0020.089%1.0%20.0010.010.000.000.01995199619971998199920002001200220032004YearTotalInvestment(billionyuan)InvestmentbySOEs(billionyuan)O-PercentageofinvestmentbySOEsFigure 2 Completed investment in residential development and the share ofinvestmentbySOEsbyyear,Beijing,1995-2004
Context: Housing Marketization Declining influence of public sector investment in residential development Figure 2 Completed investment in residential development and the share of investment by SOEs by year, Beijing, 1995-2004 13.9% 50.0% 31.5% 26.2% 11.0% 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year Investment 0.0 10.0 20.0 30.0 40.0 50.0 60.0 Percentage Total Investment (billion yuan) Investment by SOEs (billion yuan) Percentage of investment by SOEs
Context:Housing Marketization Rising Homeownership>72%.2000NationalCensus Improved housing conditionSQ.M26.130.025.025.017.820.013.515.010.05.00.01989199720042005Per Capita Building Space of Residential Housing(NationalStatisticalBureauofChina,2006)
Context: Housing Marketization Rising Homeownership ➢72%, 2000 National Census Improved housing condition 13.5 17.8 25.0 26.1 0.0 5.0 10.0 15.0 20.0 25.0 30.0 1989 1997 2004 2005 Per Capita Building Space of Residential Housing SQ.M (National Statistical Bureau of China, 2006)