Housing and Income Inequality in Europe: Distributional Effects of Non‐Cash Income From Imputed Rents

Emanuel List

Review of Income and Wealth, 2023, vol. 69, issue 2, 504-532

Abstract: This article uses survey data to estimate non‐cash income from imputed rents, using a consistent methodology for all countries to assemble comparable statistics that allow for a valid inter‐country comparison. We can confirm a significant impact of non‐cash income and find an inequality‐decreasing effect for the unconditional income distribution which highly correlates with the proportion of owner‐occupiers in the respective countries. However, aggregated inequality measures are not suited to analyze the increase in the conditional income inequality between owner‐occupiers and renters, who do not obtain income from imputed rents by definition. Therefore, we apply a reweighting decomposition that controls for the heterogeneous housing characteristics among European countries and allows us to decompose the distributional changes into a part that is explained by the proportion of tenure types and household size and a remaining part that reflects the relative dispersion of imputed rents along the income distribution.

Date: 2023
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https://doi.org/10.1111/roiw.12597

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