IMPACT OF SUBSIDY ON LOW-RENT HOUSING LESSEES' WELFARE IN CHINA

Abstract

Chinese Low-rent housing subsidy has been increasing year by year. However, it will be a very one-sided view if we only take the increasing number of subsidy into consideration when evaluating the effects of subsidy policy on low-rent housing lessees. Thus we studied on the impact of subsidy increase on low-rent housing lessees' welfare in China, and explored a valid way to evaluate the utility of the subsidy policy. At first, basing on the theory of welfare, we analyze the indifference curve model within consumption budget condition. After that, we applied the Cobb–Douglas utility function to establish a low-rent housing lessees' welfare model. Finally, some suggestions, especially in regard to the use of Information Technology to support subsidy making and protect low-rent housing lessees' welfare, are given to the Ministry of Housing and Urban–Rural Development of the People's Republic of China (MOHURD) and local Municipal Commissions of Housing and Urban–Rural Development (MCOHURD).