The preference for larger cities in China: Evidence from rural-urban migrants

Chunbing Xing and Junfu Zhang

China Economic Review, 2017, vol. 43, issue C, 72-90

Abstract: China has long aimed to restrict population growth in large cities but encourages growth in small and medium-sized cities. At the same time, various government policies favor large cities. We conjecture that larger cities in China offer a better quality of life and more opportunities. We thus predict that a typical rural-urban migrant is willing to give up some income in order to live in a larger city. We present a simple model in which rural-urban migrants choose destination cities to maximize utilities from consumption and urban amenities. Drawing data from a large-scale population survey conducted in 2005, we first estimate each migrant's expected earnings in each possible destination city using a semi-parametric method to correct for potential selection bias. We then estimate the typical migrant's preference for city population size, instrumenting population size with its lagged values to control for potential omitted-variables bias. From these estimation results, we calculate the typical migrant's willingness to pay to live in larger cities. Our results show that indeed rural-urban migrants strongly prefer cities with larger populations. We explore possible explanations for this preference and discuss the implications of these findings.

Keywords: City size; Urban amenities; Rural-urban migration; Hukou system; China (search for similar items in EconPapers)
JEL-codes: O15 R12 R23 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

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Working Paper: The Preference for Larger Cities in China: Evidence from Rural-Urban Migrants (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:43:y:2017:i:c:p:72-90

DOI: 10.1016/j.chieco.2017.01.005

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