Housing Inequality

33 Pages Posted: 25 Jan 2016 Last revised: 21 May 2021

See all articles by David Albouy

David Albouy

University of Illinois at Urbana-Champaign

Michael A. Zabek

Board of Governors of the Federal Reserve System

Date Written: January 2016

Abstract

Inequality in U.S. housing prices and rents both declined in the mid-20th century, even as home-ownership rates rose. Subsequently, housing-price inequality has risen to pre-War levels, while rent inequality has risen less. Combining both measures, we see inequality in housing consumption equivalents mirroring patterns in income across both space and time, according to an income elasticity of housing demand just below one. These patterns occur mainly within cities, and are not explained by observed changes in dwelling characteristics or locations. Instead, recent increases in housing inequality are driven most by changes in the relative value of locations, seen especially through land.

Suggested Citation

Albouy, David and Zabek, Michael Alexander, Housing Inequality (January 2016). NBER Working Paper No. w21916, Available at SSRN: https://ssrn.com/abstract=2721777

David Albouy (Contact Author)

University of Illinois at Urbana-Champaign ( email )

Michael Alexander Zabek

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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