Abstract

http://ssrn.com/abstract=1582296
 
 

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Government Intervention in the Housing Market: Who Wins, Who Loses?


Michael Kirker


University of Chicago - Department of Economics

Johannes Stroebel


New York University (NYU)

Max Floetotto


Stanford University

June 2014


Abstract:     
We study the effects of government interventions in the U.S. housing market on prices, quantities, allocations, and welfare in a general equilibrium model with heterogeneous agents. We consider (i) the introduction of temporary home purchase tax credits and (ii) a removal of the asymmetric tax treatment of owner-occupied and rental housing. Home buyer tax credits temporarily raise house prices and transaction volumes, but have negative effects on welfare. Removing the asymmetric tax treatment of owner-occupied and rental housing generates welfare gains for a majority of agents in a comparison of stationary equilibria. Importantly, welfare impacts are more varied, though still positive, along the transition between steady states.

Number of Pages in PDF File: 47

Keywords: Housing Market, Mortgage Interest Deductibility, Imputed Rents, Home Purchase Tax Credits, Policy Evaluation, Transition between Steady States

JEL Classification: C6, E21, E6, H21, R21

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Date posted: April 2, 2010 ; Last revised: October 3, 2014

Suggested Citation

Kirker, Michael and Stroebel, Johannes and Floetotto, Max, Government Intervention in the Housing Market: Who Wins, Who Loses? (June 2014). Available at SSRN: http://ssrn.com/abstract=1582296 or http://dx.doi.org/10.2139/ssrn.1582296

Contact Information

Michael Kirker
University of Chicago - Department of Economics ( email )
1126 East 59th Street
Chicago, IL 60637
United States
HOME PAGE: http://michael-kirker.com
Johannes Stroebel (Contact Author)
New York University (NYU) ( email )
Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States
Max Floetotto
Stanford University ( email )
Stanford, CA 94305
United States
HOME PAGE: http://www.stanford.edu/~maxf
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