© 1985 Urban Studies The Welfare Cost of Hong Kong's Public Housing Programme*

Summary. Public housing is an important source of accommodation i Hong Kong. Subsidies to public housing are tied to the consumption f housing services. Consumer's consumption pattern will therefore be distorted, and a welfare loss incurred as compared to an equivalent cash transfer. This paper seeks to measure the extent to which tenants ' benefit from public housing subsidies. A measure of net tenant benefit is used, which is based upon the Marshallian consumer surplus concept. The results indicate that Hong Kong's public housing programme has had a significant impact upon households' consumption patterns, and that the welfare loss is relatively low. 1