Housing Market Imperfections and Distortions Resulting from Criteria Based on House Floor Space

Miki Seko ()

Chapter Chapter 3 in Housing Markets and Household Behavior in Japan, 2019, pp 33-61 from Springer

Abstract: Abstract This is the first study to apply to Japanese housing data the econometric analysis of piecewise-linear budget constraintsPiecewise-linear budget constraints arising from space-linked subsidized interest ratesSpace-linked subsidized interest rates . The floor-space demand model employed is the classical Hausman-type with random preferences and optimization errors. We estimate that if the Government Housing Loan Corporation (GHLC) loan system operated like a private lending institution, it would eliminate the current excess burdenExcess burden per household of approximately 9% of the average GHLC credit subsidy of a home. That is, existing housing finance that adopts criteria based on the floor space of houses creates incentives for people to live in even smaller houses.

Keywords: Nonlinear budget constraints; Home loans; Floor-space demand; Japan (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advchp:978-981-13-3369-9_3

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DOI: 10.1007/978-981-13-3369-9_3

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