The two papers by Nie and Wong (2012a, 2012b) have explained the causes of the higher density and shorter life expectancies in China’s urban villages using a property rights based model. Meanwhile, in the paper by Nie and Wong (2012c), exceptional cases in Shajing, Shenzhen have been discussed, which shows that it is also possible that property rights can play a less decisive role for some occasions. Not only so, some patterns can hardly be explained conveniently using the existing literatures. Given the fact that the land law in China has not undergone any major changes in the past 20 years, in late 1990s and early 2000s, illegal construction by villagers themselves was basically “allowed” at the time, but such construction is no longer allowed in recent years, except in Shajing, Shenzhen and some remote areas. This paper provides a general method defined by some rules, built upon the existing institutional theories but reorganized, to explain the different outcomes in urban villages. The rules mentioned, of course, can also be applicable for many other cases, which then will be illustrated further in an ongoing paper following this (Nie and Wong, 2013).ReferencesNie, Z and Wong, K.C. (2012a). Why build more to earn less: property right implications of urban villages. International Journal of Construction Management, 12(4), 65-82Nie, Z and Wong, K.C. (2012b). Why do urban villages have shorter life expectancies? Observations in three Chinese cities and economic explanations. Working paperNie, Z and Wong, K.C. (2012c). Estates with “small” property rights in Shajing, Shenzhen. Working paperNie, Z and Wong, K.C. (2013). Transaction cost, non-productive cost, securable income, and economic outcomes: a general analysis. Working paper