Intergenerational Altruism and House Prices: Evidence from Bequest Tax Reforms in Italy

Quaderni - Working Paper DSE N° 947

22 Pages Posted: 24 May 2014

See all articles by Giorgio Bellettini

Giorgio Bellettini

University of Bologna - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Filippo Taddei

School of Advanced International Studies (SAIS) - The Johns Hopkins University

Giulio Zanella

University of Bologna

Date Written: May 21, 2014

Abstract

We identify the degree of intergenerational altruism in an OLG framework à la Barro exploiting the quasi-experimental variation generated by reforms of bequest taxation (estate or inheritance tax, in the U.S.) and taxes on inter vivos real estate donations (gift tax, in the U.S.) that were enacted in Italy between 2000 and 2001. Employing a unique data set containing information on the housing stock and house prices in 13 large Italian cities between 1993 and 2004, we identify the structural parameter of interest via the effect of changes in the tax rate on house prices. We find that the intergenerational altruism parameter is about 20%. Given the possible anticipation of the reform this estimate should be interpreted as a lower bound.

Keywords: altruism, bequests, inheritance tax, gift tax, house prices

JEL Classification: E60, E65, H24

Suggested Citation

Bellettini, Giorgio and Taddei, Filippo and Zanella, Giulio, Intergenerational Altruism and House Prices: Evidence from Bequest Tax Reforms in Italy (May 21, 2014). Quaderni - Working Paper DSE N° 947, Available at SSRN: https://ssrn.com/abstract=2440724 or http://dx.doi.org/10.2139/ssrn.2440724

Giorgio Bellettini (Contact Author)

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
I-40126 Bologna
Italy
+39 051 2098136 (Phone)
+39 051 2098040 (Fax)

HOME PAGE: http://sites.google.com/site/giorgiobellettiniwebpage/

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Filippo Taddei

School of Advanced International Studies (SAIS) - The Johns Hopkins University ( email )

via Andreatta, 3
Bologna, Bologna
Italy

HOME PAGE: http://https://www.sais-jhu.edu/filippo-taddei

Giulio Zanella

University of Bologna ( email )

Piazza Scaravilli 2
Bologna, 40100
Italy

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