What are the Effects of Demographic Structures on Housing Consumption?: Evidence from 31 Provinces in China

Housing is closely related to population. The world’s demographics have been changing greatly, like ageing, urbanization, and shrinking household. This paper takes China as the research object to study the effects of demographics on housing consumption. Demographics were considered from three aspects: natural structure, regional structure, and social structure. Based on Life Cycle Theory and Permanent Income Hypothesis, the models on housing consumption were constructed. Results show that demographic structures are important factors affecting housing consumption: (i) child-age dependency ratio (CDR), education level, and family size negatively affect housing consumption, while urbanization rate and old-age dependency ratio (ODR) have positive effects; (ii) CDR positively affects housing consumption through deposit and the indirect effect of ODR on housing consumption through deposit is negative; (iii) the influence of demographics on housing consumption is heterogeneous in different regions. It is relatively close between the central and the west to some extent but quite different in the east.