The Impact of Housing Prices on an Individual’s Perception of Social Safety: Evidence from Urban China

Social safety is a crucial metric for assessing social stability and progress. Since the housing system reform in 1998, housing prices in Chinese cities have surged for over two decades. Excessively high housing prices have garnered scholarly attention regarding their impact on social safety. However, most existing research explores this impact through a linear perspective. To more comprehensively identify the impact of housing prices on individuals' perceptions of social safety and provide valuable references for formulating scientific and reasonable housing and social policies, this study employs the China Family Panel Studies data and an ordered probit model. Based on the cognition-affective system theory, we empirically examine the impact of housing price increases on individuals' perceptions of social safety and its mechanisms. The findings indicate that rising housing prices initially enhance individuals' perceptions of social safety, but beyond a certain threshold, they diminish this perception, forming an inverted U-shaped relationship. Heterogeneity analysis reveals varying responses among different groups: The older generation and locals exhibit an inverted U-shaped relationship in their perceptions of social safety in response to rising housing prices, while the younger generation and nonlocals do not. Additionally, differences in housing ownership, region, gender, and household income contribute to varying perceptions of social safety. Further analysis suggests that improvements in public services and the living environment can enhance individuals' perceptions of social safety. Conversely, high housing prices heighten competition for housing and undermine confidence in future stability, thereby negatively impacting the perception of social safety.