Quantifying the Value of Clean Air Through the Lens of Housing Markets

In 2019, just 21 years after the Chinese government privatized the housing market, homeownership surpassed 96% for Chinese urban households. During that period of rapid privatization, housing and real estate assets came to account for more than 70% of total household portfolios of wealth. The concentration of household wealth combined with the flexibility of housing ownership preferences offer useful data for the analysis of how clean air policies and the associated reduced pollution impacted the value of neighborhoods within Chinese cities. Using a sample of 280 cities, a group of scholars explore cross-city variations in the implementation of clean air policy to assess how residents’ valued the aesthetic and health benefits of reduced pollution.

Their paper, “The Value of Clean Air: Evidence from Chinese Housing Markets,” was presented at the inaugural MIT Asia Real Estate Initiative Symposium, hosted at MIT in the summer of 2023. The symposium is a pillar of the MIT Center for Real Estate (MIT/CRE)’s Asia Real Estate Initiative, which provides a platform for academic and professional collaboration to center sustainability in Asian real estate development, management, and investment.

Authors of the paper include: Florida International University’s Zhenguo Lin who presented at the symposium, as well as Zhejiang University of Technology’s Jianshuang Fan and Lin Zhou.

Image Source: Mirror UK