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The paradox of housing demolition and life satisfaction: evidence from urban China

Abstract

In the rapid urban transformation era, housing demolition has posed risk towards non-market value such as life satisfaction of residents in line with most of previous literatures. However, our empirical work shows that households with demolition of their homes do not necessarily have negative life satisfaction by drawing from a sample of 9173 households in the baseline survey of the China Family Panel Studies. These findings are robust to model misspecification. We also investigated the mechanisms involved and underscore that housing demolition increases the quality of household accommodation on the one hand (positive effect) while decreasing household social connection and occupational stability on the other (negative effect). The lack of significant correlation between demolition and life satisfaction may therefore be attributable to the positive and negative effects of housing demolition on their life satisfaction after being compared in magnitude. Moreover, a huge increase in compensation in 2016 has indicated that households experiencing housing demolition in the previous year had an even higher life satisfaction than those who did not. The policy implications of these findings are also discussed.

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Fig. 1

source: CFPS 2010

Notes

  1. The Spring Festival, also known as the Chinese New Year, the most important Chinese festival, is celebrated at the first day of the traditional lunisolar Chinese calendar. Celebration activities usually last to the 15th day. During this festival, friends and relatives visit each other to express good New Year wishes.

  2. http://opendata.pku.edu.cn/dataverse/CFPS.

  3. OPM is a commonly used method that explains variation in an ordered categorical dependent variable as a function of one or more independent variables (Ferrer-i-Carbonell & Frijters, 2004). In the life satisfaction literature, the ordered probit model was used by Appleton and Song (2008), Cheng et al. (2014), Hu et al. (2020), Hu and Ye (2020), and Zhang et al. (2018), among others. Considering that the dependent variable is an ordered variable of life satisfaction measured on a 5-point integer scale ranging from 1 (very unsatisfied) to 5 (very satisfied), we also use the OPM to estimate the relationship between housing demolition and life satisfaction. The ordered logit model (OLM) is a popular alternative to the OPM, and similar results have been often obtained when using ordered logit or probit models with ordinal outcome data (Ferrer-i-Carbonell & Frijters, 2004). As a robustness check, we also estimate the baseline regression model by the OLM, and the results remain consistent.

  4. Considering that social networks are generally maintained through reciprocal activities and exchanges, such as gift giving. Some poor families may be forced to cut back on basic necessities or engage in risky behavior, such as selling blood, to afford a gift for social events (Chen & Zhang, 2012). Gift expenses increased rapidly in recent years perhaps to the point where they become nearly unaffordable for many households (Chen et al., 2011; Hu et al., 2021). Wealthy households would have more social connections since they can afford the costs associated with network connections. Table 5 suggests that residence-demolished households have more household income, deposit and financial wealth than residence-undemolished households. Residence-demolished households would have more social connections without the exogenous shock of house demolishment than residence-undemolished households. Therefore, the estimated coefficients of Demolition in columns (1) and (2) of Table 11, which suggest that housing demolition reduces visitations of family and friends during the spring festival, are the lower limiting values. In other words, the effects of house demolishment would be larger if we control for the social connections of households prior to the demolition.

  5. Violent demolition is the result of forced eviction. See Liu and Xu (2018), O’Brien and Deng (2015), and Han et al. (2018) regarding potential approaches to preventing violent demolition.

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Acknowledgements

This study was funded by the National Natural Science Foundation of China (No. 72074097, No. 72104088), the Fundamental Research Funds for the Central Universities (Jinan University, No. 19JNQM19), and the Key Project of Natural Science Foundation of Zhejiang Province (No. LZ20G030002).

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Correspondence to Xian Zheng.

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Hu, M., Zhang, X. & Zheng, X. The paradox of housing demolition and life satisfaction: evidence from urban China. J Hous and the Built Environ (2022). https://doi.org/10.1007/s10901-022-09960-2

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  • DOI: https://doi.org/10.1007/s10901-022-09960-2

Keywords

  • Housing demolition
  • Life satisfaction
  • Mechanism
  • Ordered probit model
  • China