Housing Allowance and Rents: Evidence from a Stepwise Subsidy Scheme*

In this paper, we study the effect of housing demand subsidies on rents using discontinuities in the Finnish housing allowance system as a quasi‐experimental setting. The stepwise dependence of housing allowance on the floor area of the dwelling and on the year of construction of the building causes economically and statistically significant discontinuities in the amounts of housing allowances. However, our results show that there are no discontinuities in the rents paid by the recipients of housing allowance at these cut‐offs. Instead, differences in the amounts of housing allowance are translated roughly one‐to‐one into differences in the rent net of housing allowance.     

The Impact of the German Child Benefit on Household Expenditures and Consumption

The German Child Benefit (‘Kindergeld’) is paid to legal guardians of children as a cash benefit. The benefit does not depend on household income or other household characteristics. I use exogenous variations in the amount of child benefit received by households in the German Socio‐Economic Panel to estimate the impact of a given change in the child benefit on food expenditures of households, the probability of owning a home, rent per square meter, measures of the size of the home, as well as parents’ smoking behavior and parents’ alcohol consumption. Households primarily increase per capita food expenditures in response to increases in child benefit, and they also improve housing conditions. The effect of child benefit on per capita food expenditures is larger for low‐income households compared to high‐income households. I do not find a significant effect of child benefit on parents’ smoking or drinking.     

Housing Subsidies and Work Incentives in Great Britain

The relationship between housing costs, wages and transfer programmes is complex yet helps determine the incentive to work for individuals in low income or high housing cost households. We estimate a static discrete choice labour supply model that allows for housing benefit programme participation, using samples of married women and unmarried women drawn from Great Britain Family Resources Surveys 1994/5–97/8. We find women are quite responsive to labour supply incentives and that housing benefit income has similar incentive effects to earned income which suggests any 'stigma' is small. Our analysis is complemented by simulating housing benefit and direct rent subsidy reforms.     

The Residency Discount for Rents in Germany and the Tenancy Law Reform Act 2001: Evidence from Quantile Regressions

Most countries show a residency discount in rents for sitting tenants. In the wake of strong rent increases and housing shortages, Germany implemented a reform in 2001 to curtail rent increases. Based on linked housing‐tenant data for Germany, this paper estimates panel OLS and quantile regressions of rents within tenancies. The results show that rents deflated by the CPI increase strongly from 1984 until the reform in 2001, and there is a reversal in the trend afterwards. Before the reform, there is a significant residence discount which decreases in absolute value with tenure. The reform reduces rents, in particular for expensive apartments and for new leases. There is no residency discount after the reform.     

SEEKING RENT IN THE INFORMAL SECTOR

Rent seeking within the vast informal segment of the developing world is a relatively under‐explored topic in the interface of labor market policies and public economics. Moreover, how rent seeking and corruption within the informal segment gets affected by economic reforms targeted for the formal sector is rarely discussed in the literature. This paper fills the gap. We identify conditions under which economic reform in the formal segment will increase the rate of corruption or rent seeking in the informal sector and raise the pay‐off for those involved in rent‐seeking activities. When the formal sector contracts due to reforms, rent seeking in the informal sector may increase and lower the level of welfare unconditionally. Economic reforms may increase corruption instead of reducing it, unlike standard conjectures.     

Poverty Lines as Context Deflators: A Method to Account for Regional Diversity with Application to the Democratic Republic of Congo

This paper proposes a particular methodology to render budget data more comparable over highly diverse regions. More specifically, a set of regional poverty lines will be derived and employed as deflators to correct household expenditures for spatial differences in prices and needs. The quality of these deflators depends on the extent to which the underlying poverty lines adhere to the principles of consistency and specificity. Central to reconciling both principles in practice is our pursuit for austerity in setting poverty thresholds as well as the view that differences in social norms mainly reflect differences in social inclusion needs. The particularity of the proposed method compared to standard practice lies in the combination of: (i) the pronounced subdivision in socio‐economic strata; (ii) the use of a differential calorie threshold per sector; (iii) the introduction of protein intake; (iv) the derivation of a minimal house rent; and (v) the use of an austere non‐food/non‐housing allowance. The impact of this method is illustrated using a budget survey of the Democratic Republic of Congo.     

Economic transition and private-sector labor: Evidence from urban China

This paper studies the transition of labor from the state sector to the infant private sector in urban China. We examine the impact of the first wave of housing reforms, which untied access to housing in urban areas from working for the state sector. We find that the reform significantly increased private housing ownership and private-sector employment, and reduced private-sector wages. The housing reform had no effect on unemployment or self-employment.     

Labor-Leisure Choice and Relative Income Concerns in the Shadow of the Housing Market

We theoretically examine the connection among labor productivity, work time, and housing costs in an economy with households differing in wages and neighborhoods differing in quality. We argue that the location rent component of housing cost is key to explicating the connection. We trace how the housing market makes relative income instrumental for maximizing utility even if households’ utility functions are not interdependent. Over time, productivity growth yields higher wages but households compete some of that away on the housing market. This structural inflation of location rents counteracts preferences to work less as wages rise and hinders the expansion of leisure. Relative income effects are shown to arise as a consequence of a market institution that monetizes socially-imbued preferences.     

The economic impact of reducing on-base naval housing

This article develops a methodology for estimating the impact on rents and home prices from a hypothetical reduction of on-base naval housing from 56 naval bases in the United States. Based on data from the Center for Naval Analyses and the U.S. Census of Housing, and response coefficients from housing economics literature, illustrative estimates are presented of the short-run and long-run and long-run impact of reducing naval housing.
Key factors determining the increase in rents and home prices include (1) the increase in demand for housing in the private sector resulting from the reduction of on-base naval housing, (2) the short-run and long-run elasticities of supply of private sector housing with respect to housing prices, and (3) the elasticity of demand to live in a defined housing area with respect to housing prices.
We find that the effects on rents and home prices are in most cases small in the short run and negligible in the long run. The median first-year rent increase in the 53 counties is estimated to be 0.90%, with only 9 of the counties still expected to experience rent increases of as much as 4%. In the long run, the median rent increase is estimated to be only 0.10%. Because the purchase of a home is a long-term investment, we find that the impact on home prices is negligible, similar to the long-run impact on rents.     

Is the housing allowance shifted to rental prices?

This paper deals with the incidence of housing subsidies, which we analyze using Finnish panel data. The main data set includes 50,000 households that received housing allowances during the period 2000–2008. In addition, we utilize repeated cross-sections of all Finnish households for 1989–2008, the annual sample exceeding 10,000. Estimation results suggest that a part of the subsidies will indeed go into rental prices. A conservative estimate of the size of the shift is one-third, but it is certainly possible that the number is as high as 50 %. On the other hand, the subsidy seems to have increased housing demand more than the subsidy-induced income effect would have implied, which is in accordance with the goals of the subsidy program. Our results seem to be consistent with other studies, which have also indicated relatively large rent effects. If this is indeed the case, we are advised to reconsider the need for reforming the system of housing subsidies, at least with respect to the share of costs that remains on households’ own accounts and the implicit indexation of the system.     

Housing Market and Current Account Imbalances in the International Economy

This paper presents a two‐sector, two‐country model showing that inflation in the housing market, a low personal savings rate, and a construction investment boom can contribute to a large current account deficit. In the model, demand by a group of households in the domestic country is constrained by the availability of collateral. This implies more procyclical debt capacity because constrained households can borrow against the increase in the value of their houses during an expansion. A higher degree of financial liberalization and development helps constrained households reach higher loan‐to‐value ratios, thus relaxing their borrowing constraints. The resulting higher net worth and lower need for savings imply a worsening current account.     

Information Shocks and the Dynamics of the Housing Market*

In this paper, we analyze housing‐market reactions to the release of previously unpublished information on school quality. Using high‐quality housing data, which precisely bracket the timing of the information shock, we investigate housing‐price dynamics within school‐catchment areas. We find a robust short‐term housing‐market reaction to the publication of school‐quality indicators, suggesting that this information was new to the households, and that households are willing to pay for better schools. The publication effect does not seem to be permanent as prices revert to pre‐publication levels after two to three months.     

中国住房改革对家庭耐用品消费的影响

中国的住房改革对许多城市家庭形成正的财富冲击。利用CHNS数据,我们发现:同理论预期一致,受益于住房改革的家庭消费了更多的耐用品。特别是,在住房改革的随后几年,其影响更为显著。我们还发现,住房改革对耐用品消费的次序具有影响,经历住房改革的家庭倾向于首先消费生活最必需的耐用品,然后再消费其他耐用品。通过增加家庭的耐用品消费,住房改革对扩大内需和走出当时的通货紧缩产生了积极影响。     

我国城市住房供给制度与工业化关系的理论分析

住房供给制度不仅决定着房价,也决定着工业化与土地收益的权衡。我国目前的住房供给制度和工业化目标不一致,减少政府财政对土地收益的依赖,减少开发商的垄断性收益应该是住房供给制度调整的方向。     

DISINFLATION AND HOUSING INVESTMENT: A REVISIOIIIST ANALYSIS

The pattern of housing investment through the Seventies was a product of high and variable rates of inflation, a financing system that was segmented from other capital markets and restricted in scope, and a tax system that abetted the demand for housing relative to other investments. In the early Eighties, each of these elements changed. Financial reform brought the housing name system into tune with the rest of the financial sector, and tax cuts increased the demand for forms of investment other than housing. Most important, the rate of inflation slowed dramatically, falling below 4 percent in both 1982 and 1983. The result of all these occurrences was fairly predictable: A decline in the demand for housing as an investment. However, this declining demand has been offset by two factors. The first is the drop in nominal interest rates that accompanied declining inflation. This increased the "affordability" of homing. Second, large numbers of households entered prime home-buying years and spurred demand for housing as shelter. The current situation is a housing market driven more by consumption demand than by investment demand     

The Impact of Unionization Structures with Heterogeneous Firms and Rent‐Sharing Motives

How are unemployment and output affected if wages are set on the sector level rather than firm level? We take a new look at this question, allowing for heterogeneous firms and rent‐sharing motives. Without these motives, employment and output are lower under sector‐level wage‐setting due to higher wage markups. With rent‐sharing motives, however, firm selection is higher under sector‐level wage‐setting, which tends to increase employment and output, thus counteracting the markup effect. Simulations show that the firm‐selection effect decreases the difference between the two unionization structures substantially but it does not change the signs of the effects on output and employment.     

房价水平、交通成本与产业区位分布关系再考量

中心城市房价水平或地租水平的提高具有客观性。房价水平和交通成本变动对制造业区位分布影响较大,而对于生产性服务业的影响并不显著。占用土地面积较大的制造业向外转移不仅有可能抵消房价上涨的压力,而且为具有更高附加值的生产性服务业的发展创造条件。房价水平上涨和交通成本提高加快中心城市制造业的扩散以及生产性服务业的集聚,客观上促使城市间由专业化分工向功能分工结构转变,推动中心城市实现产业升级,有利于形成合理的区域分工格局。     

住房公积金导致了不平等吗*——来自中国家庭金融调查的证据

住房公积金制度作为一项政策性住房金融制度，能够缓解家庭购房金融约束、稳定住房金融市场，成为实现“房住不炒”的重要政策工具。本文以2015年实施的住房公积金信贷宽松政策作为外生冲击，从财富效应的角度研究了住房公积金制度对不同家庭购房行为的影响。利用双重差分的实证研究方法，本文发现目前住房公积金主要促进了缴存家庭的多套房需求，加大了缴存家庭与非缴存家庭的住房财富差距。住房信贷政策的针对性与多样性急需提升。     

Shocks, Policy Reforms and Pro-Poor Growth in Bolivia: A Simulation Analysis

This paper analyzes how major external shocks and policy reforms affect Bolivia’s ability to achieve pro‐poor growth. Employing a recursive‐dynamic CGE model, it considers three different scenarios: an optimistic baseline scenario; a more realistic scenario that accounts for two important negative external shocks (declining capital inflows and El Niño); and a scenario that captures the combined effect of the shocks and two major reform projects (development of the gas sector and deregulation of the urban labor market). It turns out that the shocks are likely to impair Bolivia’s medium‐term development prospects, leading to marked increases in both urban and rural poverty. If the reform projects were implemented, the poverty increase caused by the shocks would be more than offset for urban households, but reinforced for rural households.     

Joint Adjustment of House Prices, Stock Prices and Output Towards Short‐run Equilibrium

A dynamic IS‐LM model including houses and stocks as additional assets will be analysed in this paper. Providing also housing services, a major consumption item for most households, houses create an additional link between the monetary and the real sector, distinct from the traditional wealth effect channel. We analyse the adjustment path of output, house prices and stock prices after policy shocks within a rational expectation setup. Depending crucially on the elasticity of housing services demand, different reaction patterns of asset prices will emerge. The results are contrasted with relevant empirical findings, particularly Lastrapes (Journal of Housing Economics, 11 (2002), pp. 40–74), leading to the identification of plausible elasticity ranges. The analysis sheds new light on the ongoing discussion about demand effects from changing real estate wealth and about determinants of house price fluctuations.