Tax Policy and House Price Dynamics

26 Pages Posted: 5 Aug 2010

See all articles by John E. Anderson

John E. Anderson

University of Nebraska at Lincoln - Department of Economics; Lincoln Institute of Land Policy

Date Written: November 14, 2009

Abstract

In this paper I examine the determinants of the user cost of housing, including house price inflation expectations and tax policy. I derive estimates of the user cost of housing for several U.S. metropolitan areas over the period 1995-2008 and I decompose those estimates into user cost component elasticities. In general, I find that the user cost tax elasticities are relatively small while the expected house price inflation elasticity is substantially larger and therefore plays a greater role in affecting housing market demand.

Keywords: house prices, user cost

JEL Classification: R21, H20

Suggested Citation

Anderson, John E., Tax Policy and House Price Dynamics (November 14, 2009). Available at SSRN: https://ssrn.com/abstract=1653508 or http://dx.doi.org/10.2139/ssrn.1653508

John E. Anderson (Contact Author)

University of Nebraska at Lincoln - Department of Economics ( email )

Lincoln, NE 68588-0489
United States
402-472-1190 (Phone)
402-472-9700 (Fax)

Lincoln Institute of Land Policy ( email )

113 Brattle Street
Cambridge, MA 02138-3400
United States

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