Faculty & Research

If housing is a “positional good” that enhances one’s status in the marriage market, then competition for marriage partners might motivate people to pursue a bigger and more expensive house/apartment beyond its direct consumption (and financial investment) value. To test the empirical validity of the hypothesis, we explore regional variations in both the relative shortage of brides and housing market characteristics across China. First, we verify that home ownership does generally enhance a young person’s marriage prospect. Second, we show that houses (apartments) tend to be systematically bigger and more expensive in regions with a greater sex ratio imbalance, beyond what can be explained by local income and other local population characteristics. Third, when using regional implementation of the family planning policy as instruments for the local sex ratio, the effects are still significant, suggesting a causal relationship from higher sex ratio imbalances to bigger and more expensive houses.