Prefabricated Housing Subsidy Analysis in China Based on an Evolutionary Game Model

Abstract

Prefabricated housing and cast-in-site housing are two alternatives for selection by developers and customers. The government, as the policy maker, creates incentive policies to encourage developers and customers to choose prefabricated housing. This paper aims to analyze the subsidy mechanism to theoretically confirm the subsidies’ scopes, amounts and end times through an evolutionary game model and simulation. In the game model, government subsidies affect the interactions between developers and customers in the decision-making process. The findings are as follows: 1) The developer housing subsidy can lower the housing price, while the customer housing subsidy can increase the price; 2) The government should first offer the developers a larger subsidy amount during the early development stage and then offer the customers a smaller subsidy amount later; 3) The government should determine the end time based on the proportion of developers and customers who choose prefabricated housing; 4) A higher prefabrication ratio may not always improve the development of prefabricated housing, and there is an optimal production scale that creates the best development situation. The empirical analysis shows that this model can help the government develop reasonable and optimal subsidy policies within the limit of budget to stimulate developers and customers.

Enhancing construction waste management in New Zealand: Lessons from Hong Kong and other countries

“…Innovation Incentives: Incentive structures, especially those encouraging prefabrication as a form of innovative construction methodology, have shown potential in driving innovation in the industry (Patil et al 2021, Su et al 2021, Tan et al 2023. Yet, the broader perspective on economic incentives indicates a potential risk of these becoming mere symbolic gestures without creating real impact (Shen et al 2021). New Zealand's diverse construction landscape necessitates a comprehensive incentive structure, catering to both smallscale contractors and large-scale developers.…”

Research on the tripartite evolution strategy of prefabricated building promotion based on the deepening of demand-side interests

“…Government G 1 : The cost of policymaking when the government implements fabricated buildings. [51,53] G 2 : Developers develop prefabricated buildings, providing additional social, economic, and environmental benefits to the government, and additional benefits for the future recovery and demolition of prefabricated buildings.…”

“…[ [50][51][52][53]56,57] G 3 : The government 0 s economic incentive costs, such as subsidies, tax relief, and incentives for prefabricated buildings. Among them, the proportion of subsidies received by the purchasers in total subsidy amount is r.…”

“…[9] D 5 : Social benefits and corporate reputation benefits of developers choosing prefabricated buildings [53,56,57]…”

“…The greater market risk will ultimately also seriously limit the enthusiasm of developers to choose prefabricated buildings. In the game analysis, some researchers considered the influence of purchasers in the promotion of prefabricated buildings [ 52 , 53 ]. Han et al believed that purchasers′ preference for prefabricated buildings and cast-in-place buildings is also a key factor in developers′ decision-making, but they have not yet been possible to identify the specific factors that affect purchaser preferences [ 54 ].…”