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Measuring Housing Subsidies: Distortionary and Distributional Effects in the Netherlands
Author(s) -
Rele Harry,
Steen Guido
Publication year - 2003
Publication title -
fiscal studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.63
H-Index - 40
eISSN - 1475-5890
pISSN - 0143-5671
DOI - 10.1111/j.1475-5890.2003.tb00086.x
Subject(s) - subsidy , economics , renting , equity (law) , rental housing , public economics , scope (computer science) , quality (philosophy) , argument (complex analysis) , distribution (mathematics) , microeconomics , market economy , political science , law , computer science , mathematical analysis , philosophy , biochemistry , chemistry , mathematics , epistemology , programming language
This paper measures the distortionary and distributional effects of housing subsidies in the Netherlands. Its broad scope allows us to discuss the results in the light of the main justifications for subsidising housing, i.e. the merit–good argument, external effects and the distribution motive. Our measurements reveal some patterns of subsidisation that seem difficult to justify on these grounds. This applies especially to the differences between subsidisation of rental and owneroccupied housing and between mortgage– and equity–financed ownership. Moreover, the inelastic supply of housing in the Netherlands entails that subsidisation has only a limited effect on promoting housing quality.