Does favorable tax-treatment of housing reduce non-housing investment?

Broadbent, Ben; Kremer, Michael

doi:10.1016/s0047-2727(00)00125-0

Cited by 3 publications

(4 citation statements)

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“…This study also examines how the presence of exogenous growth mechanisms would change the analysis of the tax incidence of housing assets or the effects of different taxation of different assets. We refer the literature on studies of housing taxation to, for instance, Turnovsky and Okuyama (1994), Skinner (1996), Broadbent and Kremer (2001), and Burbidge and Cuff (2005). As in Hochman (1981) and Wijkander (1984), this paper is concerned with provision of local public goods in urban economies.…”

Section: Wei-bin Zhang Amentioning

confidence: 99%

The impact of transport, land and fiscal policy on housing and economic geography in a small, open growth model

Zhang¹

2013

JTLU

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This study proposes a spatial model to examine dynamic interactions among growth, economic geography, the housing market, and public goods in a small, open economic growth model. We emphasize the impact of transport, land and fiscal policy on the spatial economy. The economy consists of the industrial sector, housing sector and local public goods. The model synthesizes the main ideas in the neoclassical growth theory, the Alonso urban model and the Muth housing model within the neoclassical open, small-growth framework. We solve the dynamics of the economic system and simulate the model to demonstrate dynamic interactions among economic growth, the housing market, residential distribution and public goods over time and space. Our simulation demonstrates, for instance, that as the tax rate on land income is increased, the total capital stocks and the stocks employed by the housing and public sectors are increased, the land devoted to local public goods falls and land rents and housing rents rise over space, and the consumption level of industrial goods and the total expenditures on public goods are increased. Our integrating model provides some new insights that cannot be obtained from the component models.

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Section: Wei-bin Zhang Amentioning

confidence: 99%

The impact of transport, land and fiscal policy on housing and economic geography in a small, open growth model

Zhang¹

2013

JTLU

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“…We refer the reader to the literature on studies of housing taxation, for example Turnovsky and Okuyama (1994), Skinner (1996), Kim (1998), Broadbent and Kremer (2001), and Burbidge and Cuff (2005). For earlier literature on the incidence of property tax, see, for example, Mieszkowski (1972), Ballentine and Eris (1975) and Brueckner (1981).…”

Section: Notesmentioning

confidence: 99%

Economic growth with space and fiscal policies with housing and public goods

Zhang

2011

Journal of Economic Studies

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PurposeThis study aims to examine dynamic interactions among economic growth, geography and the housing market with public goods financed by the government. A general dynamic equilibrium model of an isolated economy with economic geography, local public goods and capital accumulation is to be constructed. The economy has three sectors, supplying industrial goods, housing, and local public goods. The model synthesizes the main ideas in neoclassical growth theory, the Alonso urban model, and the Muth housing model in an alternative framework to the traditional growth theory.Design/methodology/approachThe model is based on the neoclassical growth theory with an alternative approach to household behavior. The paper shows how to solve the dynamics of the economic system and simulate the model to demonstrate dynamic interactions among economic growth, housing market, residential distribution and public goods over time and space.FindingsThe paper simulates equilibrium and motion of the spatial economy with Cobb‐Douglas production and utility functions. The simulation demonstrates, for example, that, as the tax rate on the land income is increased, the total capital stocks and the stocks employed by the three sectors are increased, the rate of interest falls and the output of the industrial sector and the wage rate are increased, the land devoted to local public goods falls and the land rent and housing rent rise over space, the consumption level of the industrial goods and the total expenditures on the public goods are increased.Practical implicationsThe paper provides some possible implications of the model for complicated consequences of government policy over time and space. In particular, the paper shows that a change in government policy not only has a macroeconomic impact over time, but also affects the economic geography of the national economy.Originality/valueThe paper offers insights into the linkage among growth, national public policies and economic geography.

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“…Also, there is a broad literature on housing taxation (Goode, 1960;Aaron, 1970;Rosen, 1979;Henderson and Ioannides, 1983;Hamilton and Whalley, 1985;Nakagami, 1996;Broadbent and Kremer, 2001). Many authors argue that the imputed rent of owner-occupied housing should be taxed to ensure efficient capital allocation (Goode, 1960, p. 526;Merz, 1965, p. 255;Aaron, 1970, p. 803;Berkovec, 1989, p. 157).…”

Section: Introductionmentioning

confidence: 99%

“…Many have also written on the extent to which the preferential tax treatment of owneroccupied housing reduces investment in the productive sector ( van Order, 1990;Nakagami, 1996). Some authors focus on welfare costs (Hendershott and Hu, 1983;Skinner, 1996;Gervais, 2002), while others worry about potential impacts on non-housing investments (Broadbent and Kremer, 2001).…”

Section: Introductionmentioning

confidence: 99%

Housing, taxation and retirement provision

Suntum

2009

Journal of Housing Economics

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Does favorable tax-treatment of housing reduce non-housing investment?

Cited by 3 publications

References 13 publications

The impact of transport, land and fiscal policy on housing and economic geography in a small, open growth model

The impact of transport, land and fiscal policy on housing and economic geography in a small, open growth model

Economic growth with space and fiscal policies with housing and public goods

Housing, taxation and retirement provision

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