Do double-edged swords cut both ways? Housing inequality and haze pollution in Chinese cities

Abstract

Housing inequality, where the wealthy hold much more housing than those 5 less so, is common worldwide, but how it correlates with haze pollution and hence air pollution has not been studied to date. Due to the market-oriented and finance-driven evolution of its housing system over the last two decades, housing inequality is particularly prominent in post-reform urban China while air pollution has become an increasingly serious problem too. This study explores the relationship between housing inequality and air pollution using 2002–2009 spatial panel data of 65 Chinese cities, to find that housing inequality contributes to exacerbating air pollution. It is also shown that an excessive demand for real estate development due to the uneven distribution of the housing stock is an important mechanism underlying the correlation between housing inequality and air pollution. In addition, such factors as economic development, city size, urbanization level, industrial structure, and capital stock all have different degrees of impact on the correlation between housing inequality and air pollution. The paper concludes by discussing the policy implications of this research and offering some policy recommendations.