Evaluation on Housing Purchasing Power of Urban Households

In terms of housing issues, the primary focus of economists has been the ratio of housing price to income. Argument about its applicability has not held up. Entropy weight and optimal point approach is employed to evaluate household housing purchasing power by income classes in this article. Entropy weight is more prominent in expressing the impact of the factor than subjective weight. Optimal point method uses the distance between the real value and the optimal to present the quality of order. Indices, including current, future income and asset, are introduced to comprehensively analyze housing affordability of household. The results show that the household asset has the most effect on housing purchasing power of household. With increase of household income, affordability of housing is getting stronger and stronger. Entropy weight and optimal point approach is simple and intuitive to estimate housing affordability of household by income groups. The results offer an important lesson for policymaker.