The paradox of housing demolition and life satisfaction: evidence from urban China

In the rapid urban transformation era, housing demolition has posed risk towards non-market value such as life satisfaction of residents in line with most of previous literatures. However, our empirical work shows that households with demolition of their homes do not necessarily have negative life satisfaction by drawing from a sample of 9173 households in the baseline survey of the China Family Panel Studies. These findings are robust to model misspecification. We also investigated the mechanisms involved and underscore that housing demolition increases the quality of household accommodation on the one hand (positive effect) while decreasing household social connection and occupational stability on the other (negative effect). The lack of significant correlation between demolition and life satisfaction may therefore be attributable to the positive and negative effects of housing demolition on their life satisfaction after being compared in magnitude. Moreover, a huge increase in compensation in 2016 has indicated that households experiencing housing demolition in the previous year had an even higher life satisfaction than those who did not. The policy implications of these findings are also discussed.