Market transition theory revisited: Changing regimes of housing inequality in China, 1988-2002

This paper revisits the market transition theory of Nee (1989), using housing as an alternative to income as a measure of socioeconomic attainment. We argue that housing space is a better outcome variable by which to evaluate Nee's market transition theory because it is a more consistent measure of socioeconomic success than income before and after the economic reform. Using three waves of a national household survey in 1988, 1995, and 2002, we compare temporal changes in the role of market and redistributive determinants for income and housing space. In support of a weak form of the theory, our results show that market determinants replaced redistributive determinants over time as the most significant predictors of housing space. In contrast, parallel analyses of income show mixed results for market and redistributive determinants.