Pareto improvement or Piketty inequality? Evaluating the impacts of new town development in Hong Kong

Adapting Piketty’s r / g framework to the intra-urban level, this article evaluates the development of new towns in Hong Kong with a focus on their impacts on social equity and urban inclusiveness. We substitute the pace of household wealth accumulation through housing price appreciation for capital returns and the pace of living welfare enhancement for economic growth, constructing three inequality indicators from nine census rounds (1976–2021) across nine new towns and thirteen urban districts. Our analysis reveals three findings. First, new town districts exhibit lower structural inequality than established urban areas, as concentrated housing supply compresses inequality by expanding the welfare denominator. Second, structural inequality follows a U-shaped trajectory over the new town life cycle, compressed during the intensive construction phase and rising after approximately 20 years as supply growth decelerates while city-wide accumulation of household wealth continues. Third, the transit-oriented development model delivers lower structural inequality overall but generates earlier agglomeration pressure relative to the city average, a dual signature not observed under the residential-first model. These findings demonstrate that the Pareto improvement delivered by new town development is real but temporary, as the structural tendency of household wealth accumulation to outpace welfare gains reasserts itself once build-out decelerates.