Another Look at Tenure Choice, Inflation, and Taxes

The purpose of this paper is to explore the impact of inflation on the demand for housing. The first part of the paper presents a theoretical model that identifies the effects of inflation on the after-tax cost of housing and the choice between rental and owner-occupied housing. The second part discusses the results of a simulation model that measures the effect of inflation on the aggregate demand for housing, the aggregate homeownership rate, and the price of housing. The paper concludes that while inflation can be expected to increase the aggregate demand for housing and the price of housing relative to the general price level, inflation should ultimately lead to lower rates of homeownership. A corollary that is probably more relevant today is that lower inflation rates should reduce the real value of the housing stock and increase the homeownership rate. The paper also contains forecasts of the impact of the Tax Reform Act (TRA) of 1986 upon housing demand and the probability of homeownership for a variety of households.     

Excess Returns, Inflation and the Efficiency of the Housing Market

This paper examines the influence that unexpected inflation has on the reported time pattern in housing returns. Two alternative models of expected inflation are used to study its effect: a rational expectations model and an adaptive expectations model. Findings indicate that both estimates of unexpected inflation are positively correlated with excess returns to housing. If inflation expectations are assumed to have been adaptive during the 1970s and early 1980s, serial correlation in the excess returns is shown to be greatly diminished when adjusted to control for unexpected inflation. However, substantial inertia in the pattern of the adjusted return series remains.     

Taxes and the User Cost of Capital for Owner-Occupied Housing

Owner-occupied housing is said to be favored in the tax code because the return on owner's equity is not taxed and mortgage interest and property taxes can be deducted in the computation of one's income tax base. The special tax treatment reduces the user cost of capital for owner-occupied housing.
The issue treated in this paper is the measurement of the tax rate to be employed in the user cost calculations. It is argued that different tax rates are appropriate for the tenure choice and quantity-demanded decisions, and that these values depend on the detailed tax position of the household and the method of finance. Average 1977 tax rates for household in different income ranges are calculated using the NBER TAXSIM microeconomic data file on individual tax returns.     

Alternative Mortgage Instruments, Qualification Constraints and the Demand for Housing: An Empirical Analysis

Government-guaranteed mortgage loans (GFRMs) and adjustable-rate mortgages (ARMs) were introduced to make payment to income (PTI) and loan-to-value (LTV) qualification conventions less restrictive. This paper analyzes the effect of GFRMs and ARMs on the demand for housing. Using a large national data set for the 1988 to 1989 period, we employ a two-stage procedure to estimate housing demand. In the first stage, a multinomial logit model estimates the probability of choosing an FRM, ARM or GFRM. Predicted values from the logit are used to construct user costs and estimate housing demand. Using the model estimates, we simulate demand under four different mortgage availability regimes: FRM, FRM and GFRM, FRM and ARM and all three. These simulations indicate that GFRMs, by relaxing LTV constraints, increase housing demand by approximately 6.2% relative to the FRM regime; the addition of ARMs, by relaxing both PTI and LTV constraints, raises demand by an additional 6%, for a total of 12.2% with inclusion of all alternatives.     

Problems in Demand Estimation For a New Technology

It is difficult to estimate demand for a new product or service when a prelaunch test market is not practical. This is often the case for products that incorporate advanced technology. In this article, Robert Thomas reviews 29 different research methodologies used to measure demand for a new telecommunications service. He found several problems in how the research was designed and executed and offers a number of suggestions for improving the accuracy of demand estimates.     

An Investment Model of the Demand and Supply For Industrial Real Estate

A recent inventory of industrial building in fifty-two major metropolitan areas of the country indicates that most such space is either owner occupied or single tenant. This suggests that the production of industrial space may be modeled as a firm "investment" decision. Using the completion date of each inventoried building, we construct a time series of plant completions that moves similarly to some other national investment data. We are able to successfully estimate an "accelerator" type model of plant deliveries, driven by movements in employment and the after-tax cost of corporate capital. Our model can be used to estimate a measure of excess plant capacity in the market, and historic values of this measure do move parallel to some recent industrial vacancy data.     

Taxes, Points and Rationality in the Mortgage Market

This paper addresses the issue of why discount points exist in the mortgage market. In the process of resolving these questions, a number of insights into the mortgage market are achieved. An important principle is that changes in loan structure due to points, prepayments or other deviations in the typical mortgage have no impact on the competitive rate of return. Thus, the essential role of points is not to raise the effective rate of return nor are they the purchase price a risk-averter desires for an option to prepay. Instead it is taxes that play the critical role.     

从供需角度分析美国住房保障

文章介绍了美国从20世纪30年代至今针对中低收入阶层的住房保障政策,并通过供给和需求两个角度来分析美国在不同阶段采取不同住房保障模式的历史原因.结合中国现状指出美国住房保障对中国的借鉴意义.     

Savings and Loan Demand for Liquid Assets: Theory,Evidence and Implications for Policy*

In this study a model of liquid asset management for individual savings and loan associations is developed. The model combines features of portfolio theory and inventory theory and is used to draw hypotheses on the relationship between the demand for excess liquidity and a variety of independent variables. Pooled cross section-time series equations are estimated for the demand for excess liquidity of 198 S & Ls over the period 1974–1978. In addition to conclusions on the role of individual variables, the estimated equations reveal that the FHLBB can affect the portfolios of some, but not all, S & Ls. This implies that FHLBB liquidity policy can have an effect on the mortgage market.     

A National Policy and Budgetary Framework for Housing and Community Development*

Recent legislation has determined that federal budget allocations and tax expenditures for housing should be tied to specific housing goals or “missions.” The major issues of national housing policy can be organized within six problem areas—three relating to production and three to consumption. Current federal housing programs can be classified into four broad budget categories (involving mortgage credit and thrift institutions, housing assistance, community development, and tax expenditures) and a fifth off-budget category of credit market activities. By examining a matrix that relates these five areas of federal involvement to the six broad problem areas, this article attempts to provide an analytical foundation for a national policy and budgetary framework for housing, housing finance, and community development.     

A Cash Flow Model of Rational Housing Tenure Choice*

This paper develops a model of housing costs in a cash flow framework. The cash flow approach allows both the consumption and investment aspects of tenure choice to be analyzed. By solving the model for the rental flow equivalent to any owning situation, we can determine whether or not a household would buy or rent from an economic perspective. The results are very sensitive to the household's income, the expected duration of occupancy, the mortgage interest rate, and inflation expectations. The results suggest that “rule-of-thumb” generalizations about tenure choice are often ill-founded, and that studies of tenure choice need to explicitly consider the interaction of income, taxes, length of occupancy and expectations.     

Homeownership Returns, Tenure Choice and Inflation

This paper empirically investigates the impact of inflation on homeownership returns and tenure choice when the assumptions underlying the user cost of housing are modified to reflect separately the effects of unanticipated and anticipated inflation. The analysis demonstrates that when the user cost model is specified to reflect the impact of anticipated inflation on house prices, the mortgage interest rate and the capitalization rate, the returns to homeownership are lower than determined by previous user cost studies and are consistent with a reasonably efficient market.     

美元汇率、通货膨胀与油价

美元对欧元等主要货币持续走低及通货膨胀所造成的美元贬值是导致国际原油名义价格走高的重要原因之一。若按美元实际价值计算．2004年的实际油价已低于2000年的名义价格。如果2005年美元对政元等主要货币继续走软,加上通货膨胀的影响,将为2005年国际原油名义价格进一步上升提供强有力的支撑,2005年政佩克一揽子油价的价格带范围应为32～41美元／桶。     

The Impact of Growth Control Regulations on Housing Prices in California*

This paper examines the impact of growth controls on the price of new single-family homes. Four types of growth controls are discussed and each is found to have a significantly different impact on housing prices. Regulations that are imposed by one locality only are first compared to those that are imposed by a locality whose neighbors also control growth. In California, increases in house prices in communities with only local growth controls cannot be distinguished from communities that do not control growth. However, the 1969 to 1976 housing price increase in growth control jurisdictions located in extensively regulated housing markets is significantly higher than in local-only or no-control jurisdictions. In addition, controls that restrict the rate of development are compared to those that specify the quality of development. In the extensively regulated San Francisco Bay area, the 1969 to 1976 housing price increase was 35% higher in rate-controlled communities and 20% higher in quality-controlled communities than in no-control communities.     

依托信息管税 强化税源管理

以信息管税为抓手,健全税源监控和管理体系,以解决征纳双方信息不对称问题为重点,加快信息化建设,提升队伍素质,提高征管质效,逐步实现税收征管现代化。     

Risk and Return to Housing, Tenure Choice and the Value of Housing in an Asset Pricing Context

Homeowners do not diversify their risky home equity because of fixed costs of issuing securities and information costs. An asset pricing model is developed for homeowners with the undiversifiable home equity asset. Homeowner value and house value to diversified landlords are compared, and a tenure choice equation is developed. We demonstrate the existence of a rational expectations equilibrium under appropriate conditions.     

Growth, Technology, and the Demand for Scientists and Engineers

This study decomposes changes in science and engineering employment into their growth and technological change components, using an input-output approach. The analysis is based on highly disaggregated industy-occupation employment data and reveals that approximately 30 per cent of the change in total science and engineering employment can be attributed to technological change. This contrasts with the 54 per cent figure found in earlier research. The difference in these findings is due to the highly aggregated data employed in the earlier research.     

论住房制度改革及住房保障的发展

通过系统的回顾我国住房制度改革的发展历史,以及对住房市场和住房保障两条发展路线的梳理,结合福利经济学的观点,提出住房保障是住房市场的必要补充,是对社会财富合理再分配的观点.提出了住房保障应当与住房市场相互协调,住房保障的规模要与经济发展水平、社会发展阶段相适应的相互发展关系.     

Housing and the Weather

Monthly readings on housing construction and sales that are at odds with expectations are often attributed to unusual weather conditions. This paper examines the empirical relationship between weather abnormalities and housing activity. The conclusion is that unseasonable weather patterns have, at most, a slight impact on total housing starts, home sales, and the pace of construction activity. Even this weak effect is found only during the winter months. Sampling error accounts for much more of the month-to-month changes in measured housing activity than does the weather, and there is a general tendency to exaggerate the influence of unusual weather on the monthly national housing data.     

Real Estate Brokers, Nonprice Competition and the Housing Market

Given a fixed commission rate and easy entry, economic profits must be competed away on some nonprice margin in the real estate brokerage market. This paper focuses on nonprice competition in the level or quality of services offered buyers and sellers in the market, examining the equilibrium adjustment process, comparative static predictions and efficiency implications. In contrast with earlier studies focusing on wasteful advertising, this paper demonstrates that higher commission rates can either increase or decrease deadweight loss, depending upon how broker services affect buyer and seller transaction costs.