Quantifying misallocation of public housing

Jennifer Buurma-Olsen, Hans R.A. Koster, Jos van Ommeren and Jort Sinninghe Damsté

Journal of Public Economics, 2025, vol. 242, issue C

Abstract: We empirically investigate how rent control combined with the use of a non-market allocation mechanism – centralised waiting lists – affects the efficiency of housing allocation among public-housing tenants. We show that, on average, Dutch public-housing tenants consume a house whose value differs by 7.5% from what they would consume under an efficient allocation. This entails particularly large transfers in housing consumption from younger households to older households. The annual welfare loss arising from misallocation within the public-housing sector is modest, estimated at around €65 per tenant.

Keywords: Misallocation; Public housing; Rent control; Non-market allocation (search for similar items in EconPapers)
JEL-codes: D61 R21 R30 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:242:y:2025:i:c:s0047272724002081

DOI: 10.1016/j.jpubeco.2024.105272

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