Table of Contents

ABSTRACT

The Huai River Policy was established to demarcate China’s winter district heating borderline between the north and the south at the beginning of the 1950s and is still in use today. The Huai River hypothesis first proposed in this paper suggests that winter district heating affects people’s moving choices and population migration by impacting the outdoor air quality and indoor living environment of areas with and areas without heating. This paper constructs a theoretical model to analyze the impact of the Huai River policy on population migration in China. The model considers the tradeoff between outdoor air quality and indoor living environment, which could affect population migration in two directions. The subsequent econometric analysis uses the Hausman-Taylor estimator and breakpoint regression methods. It further verifies the inference in the model: the population in-migration of the places south of the central heating borderline has a positive U-shaped relationship with the distance between the locations and the borderline. In recent years, many people have called for revision of the Huai River policy. This paper provides and evaluation of the potential revision of the policy. The Huai River policy has changed China’s population distribution and profoundly affected China’s economic development.

Keywords: the Huai River Policy, the Huai River Hypothesis, Central Heating, Air Quality, Population Migration, the Qinling-Huaihe Line