When education policy and housing policy interact: can we correct for the externalities?

Charles Leung

ERES from European Real Estate Society (ERES)

Abstract: Since K-12 education is provided locally in the U.S., housing policy and education policy are inevitably tied together. To deepen our understanding of this institution, we build a spatial equilibrium model where the peer group effect and local public finance play essential roles. Our model is calibrated to matches several stylized facts of the labor market and housing market. Also, our counter-factual policy analyses yield new results. First, the location of public housing units (PHU) is crucial to the welfare implications of the policy. Second, even when public housing policy (PHP) and housing voucher (VC) program deliver similar results at the household level, PHP tends to benefit the offspring more, while VC is the reverse. Third, combining school finance consolidation (SFC) policy with PHP can outperform single-policy regimes, even lead to a Pareto improvement. Welfare results in the short and long run can differ significantly.

Keywords: endogenous sorting mechanism; housing voucher; Public Housing; school finance consolidation; short-run rigidity versus long-run flexibility (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2019-01-01
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (3)

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