Housing affordability, preferences and expectations of elderly with government intervention

As Hong Kong is approaching an ageing society, it is important for the government to study elderly people's housing needs in order to design a housing system suitable for them. In light of this, we investigate the housing preferences of the elderly in Hong Kong. Unlike most of previous studies which look for factors directly affecting elderly people's housing preferences, we take an indirect approach by analyzing the factors affecting elderly people's housing expectation, which in turns affect their housing preferences. The research uses prospect theory to analyze how these factors influence their expectation on housing. In particular, we introduce the cutoff effect into our prospect theory framework. This is the first study to apply prospect theory to investigate elderly housing. We also use a linear regression model to analyze factors affecting elderly people's satisfaction level on their current housing. The results show significantly higher satisfaction level on current housing on respondents with more income and those living in public housing. The elderly people's high level of satisfaction on their current housing in fact reflects their preference for ageing in place. Therefore, the government's housing policy should help the elderly people to age in place more conveniently so that they can live with dignity in a familiar environment.