Does Space Matter? The Case of the Housing Expenditure Cap

Yifan Gong and Charles Leung

ISER Discussion Paper from Institute of Social and Economic Research, Osaka University

Abstract: In our evaluation of the housing expenditure share cap, a macroprudential policy, we discover the importance of modeling space. The spatial considerations allow households to sort into segmented housing markets based on income. Our model generates the observed negative relationship between housing expenditure share and income. More importantly, the cap policy causes a more considerable reduction in housing costs for low-income families than for high-income families in a spatial model. Depending on the assumption of households' preference, this mechanism leads to a minor increase or even a modest decrease in welfare inequality in a spatial model than in a spaceless model.

Date: 2023-09
New Economics Papers: this item is included in nep-geo, nep-ger and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.iser.osaka-u.ac.jp/library/dp/2023/DP1214.pdf

Related works:
Journal Article: Does space matter? The case of the housing expenditure cap (2024)
Working Paper: Does space natter? The case of the housing expenditure cap (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:1214

Access Statistics for this paper

More papers in ISER Discussion Paper from Institute of Social and Economic Research, Osaka University Contact information at EDIRC.
Bibliographic data for series maintained by Librarian ().