How do services of owner-occupied housing affect income inequality and redistribution?

Jorge Onrubia, M. Carmen Rodado and Luis Ayala ()
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Jorge Onrubia: Universidad Complutense de Madrid
M. Carmen Rodado: Universidad Rey Juan Carlos

No 112, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: This paper aims at analyzing the redistributive impact that the inclusion of imputed rental market value of owner-occupied housing would have when quantifying ability to pay, rather than the legal imputation that considers cadastral values. We consider the Spanish Personal Income Tax as reference, due to the differential treatment that provides to this type of income, together with the higher percentages of ownership for primary residence in Spain. The analysis is carried out through a micro-simulation exercise in which different scenarios are proposed. Our results show that the measurement of income including market value incomes resulting from actual or potential use of significantly modifies income inequality and IRPF progressivity and redistribution.

Keywords: owner-occupied housing services; inequality by income sources; personal income tax; progressivity; redistribution (search for similar items in EconPapers)
JEL-codes: D31 D33 H23 H24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp and nep-ure
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2009-112

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