The Incidence of Housing Allowances: Quasi-Experimental Evidence

Essi Eerola, Teemu Lyytikäinen, Tuukka Saarimaa and Tuuli Vanhapelto

No 149, Working Papers from VATT Institute for Economic Research

Abstract: This paper studies the effects of housing allowances on rents. Our research design is based on a reform that made the allowance more generous for small housing units as a quasi-experimental setting. We find that large increases in housing allowances for small housing units have little or no effect on their rents relative to larger units. Thus, the incidence of the reform is largely on allowance recipients and not on their landlords. Consistent with very moderate rent effects, we do not find evidence of recipient households responding to the increased incentive to choose small units. A possible explanation is that optimization frictions and short expected allowance spell duration limited demand responses to the reform.

Keywords: rental housing; demand subsidies; housing allowance; rent; incidence; housing demand; Local public finance and provision of public services; Social security; taxation and inequality; H22; R28; fi=Asuntopolitiikka|sv=Bostadspolitik|en=Housing policy|; fi=Sosiaaliturva|sv=Social trygghet|en=Social security| (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-eur, nep-exp and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.doria.fi/handle/10024/185961

Related works:
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:fer:wpaper:149

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from VATT Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Anita Niskanen ().